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After The Close - The last day of the holiday-shortened week found traders in a decidedly more positive mood, as the major U.S. stock indexes spent the entire session firmly on the plus side of the ledger.

This morning’s jobs report undoubtedly helped set the tone today. Specifically, the Department of Labor reported that total nonfarm payroll employment increased by 312,000 in December, which was well above expectations. The biggest gains came from healthcare, food services, construction, and manufacturing. Moreover, the combined tallies for October and November were revised upward by 58,000 more than previously reported. Meanwhile, although the unemployment rate ticked up to 3.9% in December, this was just 0.2 percentage points off of its 49-year low.

Investors were likely also encouraged by comments made today by Federal Reserve Chairman Jerome Powell, in which he indicated that the lead bank was prepared to be flexible with monetary policy. The Fed had previously signaled that there would be two additional rate increases this year, so today’s comments suggest the plan is not necessarily set in stone.

At the closing bell, the Dow 30 was up 747 points, or 3.3%, the S&P 500 was ahead by 84 points (3.4%), and the tech-laden NASDAQ moved up 275 points (4.3%). The surge was widespread, with advancing issues outnumbering decliners by more than 7-to-1 on the NYSE. Unsurprisingly, all of the major market sectors were firmly in the green, with the biggest gains coming from technology (up 4.7%), basic materials (4.6%) and industrials (3.7%). Utilities, which tend to be defensive, brought up the rear, with a gain of 1.5%.

Elsewhere, oil prices advanced, with light sweet crude rising 2.4%, to around $48.25 a barrel. Trading on the European bourses was also upbeat, with Germany’s DAX advancing 3.3%, while France’s CAC-40 moved up 2.7%, and Britain’s FTSE 100 gained 2.1%. – Mario Ferro

At the time of this article's writing, the author did not have positions in any of the companies mentioned.

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11:45 AM EST - Just one day after a dour release on U.S. manufacturing activity and a high-profile warning on quarterly revenues in the tech sector combined to send the markets into free-fall, with the Dow Jones Industrial Average plummeting 660 points, a series of much more upbeat events sent traders scurrying to buy.

On point, before the stock market opened this morning, indications from China that it would soon enter into trade talks with the United States sent the equity futures up sharply. Then, one hour before the market began trading, the Labor Department reported that our nation had created 312,000 jobs in December. That was almost twice the 176,000 gain forecast.   

Also, average hourly earnings rose strongly for workers on private payrolls, gaining 3.2% in the past year, while job growth totals for both October and November were revised upward. This brought some additional cheer to an investing public that often has been starved for such upbeat tidings in recent weeks.

Then, after the Dow opened some 300 points higher, Federal Reserve Chair Jerome Powell gave the Street what it sorely wanted by suggesting that the central bank would be patient in raising interest rates. He said, in fact, that there was no preset path for policy. This would indicate that further rate hikes may be of the table for a while, although our sense is that it is premature to speculate on the possibility of any rate cuts this year.

So, as we head into the noon hour, we see that the Dow is now up some 600 points; the S&P 500 Index is ahead 67 points; and the NASDAQ is better by 225 points--easily outperforming the other composites on strength in technology. It is a strong answer so far to the headwinds of yesterday.  - Harvey S. Katz, CFA

At the time of this article's writing, the author did not have positions in any of the companies mentioned.

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Before The Bell - Wall Street, which suffered through a lackluster 2018, a difficult fourth quarter, and a woeful December, is backing off again. To be sure, there was an encouraging comeback on Wednesday, when the few remaining bulls managed to overcome a 400-point drop in the Dow Jones Industrial Average early on and similar declines in the other indexes to post nominal gains by the close. However, yesterday, a resumption of the selloff could not be reversed or modified much as the day wore on. On Wednesday, to recap, the market sold off initially and came back later. The impetus for the early drop was a surprise decline in manufacturing in China. 

Then, yesterday, it was a dour issuance from technology icon Apple (AAPL Free Apple Stock Report) that set in motion a furious early selloff. Apple, it seems, will report a disappointing revenue performance in the latest quarter. That stock, which already had tumbled from $233 a share earlier this past fall, and more recently had sold off to below $150, fell back by some $15 a share early on Thursday, to under $145.

But that was not all. In addition, the Institute for Supply Management reported that its own manufacturing survey had dropped from a solid 59.3 reading in November to 54.1 in December. Worse, that result was well below expectations. Not only did the overall index evidence a slower rate of expansion, but several components, including new orders fell back sharply. Included in the sectors evidencing a slower rate of expansion last month were production, employment, supplier deliveries, prices, and backlogs. Last month also saw the biggest month-to-month deterioration in a decade. The disappointing manufacturing data evoked fears of a wider slowdown in global growth, which could make its way here. Obviously, the Apple news, which the company laid on the doorstep of weaker demand out of China, only worsened matters.

The stock market then continued to drift throughout the remainder of the morning, after reaching its lows for the first part of the session with a Dow deficit of some 650 points. In fact, by the late morning, the Dow's retreat had been pared to below 400 points, briefly. But that comeback did not presage a further recovery in the afternoon, as had been the case on Wednesday. Material positive reversals also had been seen last week. Meantime, it was not just AAPL that fell sharply, but the chip stocks fell on fears about China's growth, the airlines, and a number of industrial stocks were down, as well.

As for the overall market, the indexes, which had held in the red to the tune of some 400-500 points in the Dow into the first part of the afternoon, would weaken anew near the close, falling to near session lows in the last half hour. With rising fears of an economic slowdown rising across the globe, as well, as in the United States, with worries about corporate profits increasing, as we head into earnings reporting season, and with the specter of divided government now a reality, as Nancy Pelosi takes over as Speaker of the House of Representatives, the sellers are still in charge.              

In all, the Dow, under pressure across the board, tumbled by 660 points (or 2.8%); the S&P 500 Index retreated by 62 points (or 2.5%); and the NASDAQ saw sufficient selling to push that composite down by 202 points (or 3.0%). As noted, the major casualty was Apple, but there were other notable losses on the day, with erstwhile investor darling Weight Watchers (WTW) dropping more than 8% to $36.55 a share. Earlier in 2018, that volatile issue had traded above $105 a share. The gap between gaining and losing stocks on the NYSE was fairly narrow, as some big 2018 losers continued to attract post tax-loss selling nibbles.

Now, following this steep loss, a new day is upon us, and the scheduled release on December non-farm payrolls has, indeed, been sent out. And this closely watched metric surprised notably to the upside, with non-farm payrolls surging by 312,000 in December. That was twice the 155,000 increase forecast and well ahead of November's upwardly revised tally of 176,000. In other news on that front, the unemployment rate climbed by 0.2% last month, going from 3.7% to 3.9%. However. that increase may just have reflected more Americans now looking for jobs. When that occurs, those individuals are again factored in as unemployed.   

Meanwhile, in other details of that report, the average workweek for all employees in private sector jobs rose slightly last month. Also, the labor-force participation rate climbed to 63.1% in December, a somewhat better reading, while average hourly earnings last month increase by $0.11, to $27.48. Over the past year, such wages are up 3.2%, which is mildly inflationary. As for the market, following earlier gains in Europe, our futures are still up strongly, despite some easing in the past few minutes on this modestly inflationary report, with optimism earlier in place due to expectations that pending talks with China could bring movement on trade.  - Harvey S. Katz, CFA    

At the time of this article’s writing, the author held positions in one or more of the companies mentioned.