Strong weekly gains for US stocks at Wall Street

Disappointing job report fails to curb weekly gains

US stocks ended the first week of FY 2010 with good gains. The week that ended on Friday, 08 January, 2010 did not have any important catalyst but still indices struck new fifty-two week highs. Stocks infact also digested a worse than expected labor market report.

For the week, that ended on Friday, Dow ended higher by 190.14 points (1.8%) at 10,618.19. Nasdaq ended higher by 48.02 points (2.1%) at 2317.17. S&P500 gained 29.88 points (2.7%) at 1144.98. The energy, materials, financial and industrial sectors led the weekly gains.

Economic data did not do much to impress the investors during the week as the same were mixed in nature. December ISM Index topped expectations at 55.9 against an expected 54.3 but construction spending missed estimates.

Meanwhile, retailers reported their December same-store sales numbers, which were generally better than expected. In addition, many of the retailers increased their earnings guidance in conjunction with their same-store sales updates.

At the end of the day on Friday, 08 January, 2010, the Dow Jones Industrial Average ended higher by 11.33 points at 10,618.19. Nasdaq ended higher by 17.12 points at 2317.17. S&P 500 ended higher by 3.29 points at 1144.98. Dow was down by 32 points earlier during the day. A late rally helped stocks end in the green.

Five of the ten economic sectors ended higher for the day led by industrials, technology, and material sectors. Financial and consumer staple sectors lagged.

There were quite a few analyst downgrades in the market on Friday. The financial sector remained a laggard in the market on Friday after Citigroup downgraded quite a few firms like Goldman Sachs, JP Morgan etc. On the other hand, the consumer staples sector was also hit after JP Morgan downgraded Coco Cola and Colgate Palmolive.

Crude oil prices rose on Friday, 08 January 2010. Prices rose as dollar slipped following disappointing job data at Wall Street thereby enhancing the appeal of commodities as an alternate investment. But crude managed to end only marginally higher.

On Friday, crude-oil futures for light sweet crude for February delivery closed at $82.75/barrel (higher by $0.09 or 0.1%). Earlier during the day, prices fell to a low of $82.55. Crude ended the week, higher by 4.3%.

In the currency market on Friday, the dollar index, which weighs the strength of dollar against the basket of six other currencies fell by almost 0.7%.

Among economic data for the day, The Labor Department in US reported on Friday, 08 January, 2010 that nonfarm payrolls fell by a seasonally adjusted 85,000 in December 2009 following a revised 4,000 gain in November 2009, which was the first increase in payrolls since December 2007. During 2009, payrolls fell by 4.2 million.

The official unemployment rate remained at 10% in December as the labor force contracted by the largest amount in nearly 15 years. After averaging nearly 700,000 a month in the first quarter of 2009, job losses decelerated to an average of 69,000 in the fourth quarter.

Indian ADRs ended mixed on Friday. ICICI Bank was the main loser shedding 2.1%. WNS Technologies and VSNL were the main gainers soaring 2.5% and 1.8% respectively.

Earnings reports will start to pick up next week with Alcoa reporting on Monday marking the unofficial start of Q4 earnings, followed by bellwethers Intel and JPMorgan Chase.