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US stocks surge more than 1% despite weak jobs growth

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US stocks surged Friday despite a labor report that said the US economy added far fewer jobs than expected in January.

The Dow Jones Industrial Average shot up 165.55 points (1.06 percent) to 15,794.08.

The broad-based S&P 500 gained 23.59 (1.33 percent) at 1,797.02, while the tech-rich Nasdaq Composite Index advanced 68.74 (1.69 percent) to 4,125.86.

The gains came after the Labor Department said the economy added 113,000 jobs in January, far below the 175,000 forecast.

Analysts said there were some positive aspects to the report, such as the rise in labor force participation.

Graphic charting monthly US unemployment January 2013 to January 2014
Graphic charting monthly US unemployment January 2013 to January 2014
AFP Graphics, AFP

Some analysts said the unusually severe winter weather in January may have been a factor in the tepid jobs growth.

"In general, it was a disappointing jobs report," said Jack Ablin, chief investment officer at BMO Private Bank.

"But if you buy the argument that the polar vortex has had an impact on the economy then it's probably a pretty good jobs report."

Apple rose 1.4 percent after chief executive Tim Cook said in an interview that the company bought back $14 billion in stock in the wake of a disappointing earnings report released in late January that hit Apple's valuation.

Citigroup shares shot up 2.3 percent on a bullish research note by Bank of America, which said worries about the bank's weak fourth-quarter earnings and exposure to emerging markets were excessive.

Internet travel company Expedia got a big lift from fourth-quarter earnings of 92 cents per share, handily beating estimates of 86 cents. Shares jumped 14.3 percent.

Expedia's results also boosted other online travel companies, including TripAdvisor (+9.5 percent) and Priceline (+5.0 percent).

Twitter, which lost nearly one-fourth of its value Thursday on a disappointing earnings outlook, enjoyed a partial recovery. Shares advanced 8.6 percent.

But one tech company that suffered Friday was LinkedIn, which projected 2014 revenues of $2.02-$2.05 billion, well below the $2.16 billion expected by analysts. Shares tumbled 6.2 percent.

Gap Inc. jumped 5.8 percent on data that showed it bucked the trend of weak retail sales during the year-end holiday shopping season. Fourth-quarter comparable sales rose one percent.

The retailer forecast earnings of 65-66 cents per share for the fourth quarter, more than the 61 cents projected by analysts.

Bond prices were mixed. The yield on the 10-year US Treasury slipped to 2.67 percent from 2.70 percent, while the 30-year rose to 3.67 percent from 3.65 percent. Bond prices and yields move inversely.

US stocks surged Friday despite a labor report that said the US economy added far fewer jobs than expected in January.

The Dow Jones Industrial Average shot up 165.55 points (1.06 percent) to 15,794.08.

The broad-based S&P 500 gained 23.59 (1.33 percent) at 1,797.02, while the tech-rich Nasdaq Composite Index advanced 68.74 (1.69 percent) to 4,125.86.

The gains came after the Labor Department said the economy added 113,000 jobs in January, far below the 175,000 forecast.

Analysts said there were some positive aspects to the report, such as the rise in labor force participation.

Graphic charting monthly US unemployment January 2013 to January 2014

Graphic charting monthly US unemployment January 2013 to January 2014
AFP Graphics, AFP

Some analysts said the unusually severe winter weather in January may have been a factor in the tepid jobs growth.

“In general, it was a disappointing jobs report,” said Jack Ablin, chief investment officer at BMO Private Bank.

“But if you buy the argument that the polar vortex has had an impact on the economy then it’s probably a pretty good jobs report.”

Apple rose 1.4 percent after chief executive Tim Cook said in an interview that the company bought back $14 billion in stock in the wake of a disappointing earnings report released in late January that hit Apple’s valuation.

Citigroup shares shot up 2.3 percent on a bullish research note by Bank of America, which said worries about the bank’s weak fourth-quarter earnings and exposure to emerging markets were excessive.

Internet travel company Expedia got a big lift from fourth-quarter earnings of 92 cents per share, handily beating estimates of 86 cents. Shares jumped 14.3 percent.

Expedia’s results also boosted other online travel companies, including TripAdvisor (+9.5 percent) and Priceline (+5.0 percent).

Twitter, which lost nearly one-fourth of its value Thursday on a disappointing earnings outlook, enjoyed a partial recovery. Shares advanced 8.6 percent.

But one tech company that suffered Friday was LinkedIn, which projected 2014 revenues of $2.02-$2.05 billion, well below the $2.16 billion expected by analysts. Shares tumbled 6.2 percent.

Gap Inc. jumped 5.8 percent on data that showed it bucked the trend of weak retail sales during the year-end holiday shopping season. Fourth-quarter comparable sales rose one percent.

The retailer forecast earnings of 65-66 cents per share for the fourth quarter, more than the 61 cents projected by analysts.

Bond prices were mixed. The yield on the 10-year US Treasury slipped to 2.67 percent from 2.70 percent, while the 30-year rose to 3.67 percent from 3.65 percent. Bond prices and yields move inversely.

AFP
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With 2,400 staff representing 100 different nationalities, AFP covers the world as a leading global news agency. AFP provides fast, comprehensive and verified coverage of the issues affecting our daily lives.

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