Stocks Jump After January Jobs Report; Dow Tops 14,000
"Extremely high inflows into equities do not bode well for the medium-term performance of the stock market," the Cantor note said. "On average, the S&P 500 fell 0.8% in the three months following the previous nine largest monthly inflows into equity MFs and ETFs, and three-month returns were negative after six of those nine months."
The Bureau of Labor Statistics said Friday that 157,000 jobs were added to payrolls in January; figures for December were revised higher to 196,000. On average, economists expected 160,000 jobs to be added in January.
The unemployment rate ticked up to 7.9% from 7.8%. Economists expected the rate to remain at 7.8%.
"Revisions rather than the guts of the January data is what make this a pretty good report," said Eric Green, global head of research for rates and foreign exchange at TD Securities. "Still, the Fed is looking at job growth and participation rates even more than unemployment. Taken together, recent data on all three do not put the Fed any closer to terminating QE," its bond-buying program.
"In general, the report is consistent with more QE; the labor market is gradually healing and making progress, but there are no real signs of substantial improvement," said Julia Coronado, chief North American economist at BNP Paribas.
A gain of 166,000 was recorded for nonfarm private payrolls for January, versus an upwardly revised 202,000 for December. Expectations were for an increase of 165,000.
A flood of other economic reports in the morning generally took on a more positive tone.
The final read on The Reuters/University of Michigan's consumer sentiment index for January was 73.8, up from the prior estimate of 71.3. Economists predicted a read of 71.5.
The ISM Manufacturing survey showed an increase in January to 53.1 from 50.7 in December. A reading of 50.6 was expected.
The Census Bureau reported that construction spending rose 0.9% in December after ticking up by an upwardly revised 0.1% in November. Forecasts called for a 0.6% rise in December.
Gold for April delivery climbed $8.60 to settle at $1,670.60 an ounce at the Comex division of the New York Mercantile Exchange, while March crude oil futures were up 22 cents at $97.71 a barrel.
The benchmark 10-year Treasury slipped 11/32 to dilute the yield to 2.028%. The dollar was off 0.04%, according to the U.S. dollar index .
In corporate news, Dell(DELL) , the PC maker, is close to an agreement to sell itself to a buyout group led by founder and CEO Michael Dell and private-equity firm Silver Lake Partners, Reuters reported, citing two people familiar with the matter.
A deal could possibly be announced as soon as Monday, Reuters reported.
Shares popped 3%.
Bristol-Myers Squibb (BMY) is seeking a buyer for a collection of brands in Mexico and Brazil that could fetch as much as $750 million, The Wall Street Journal reported, citing people familiar with the matter.