Stocks rise as traders shrug off unemployment
NEW YORK Stocks rose early Friday as investors shrugged off news that more jobs were lost in October than expected, pushing the unemployment rate above 10 percent for the first time since 1983.
The rise in joblessness reassured some investors that the Federal Reserve will have to hold interest rates lower for some time. That weakened demand for the dollar, which gave a boost to stocks.
Safe-haven assets like Treasurys were mixed. Oil prices plunged and gold topped $1,100 an ounce for the first time.
The jobs report bodes poorly for consumer spending, a major component of economic activity. Consumers will cut back on their spending if they are worried about losing their jobs. And robust consumer spending is necessary to sustain the economic recovery.
The Labor Department said employers cut 190,000 jobs last month, less than the 219,000 jobs lost in September, but more than the 175,000 job losses economists had forecast. The unemployment rate jumped to 10.2 percent from 9.8 percent in September.
The government also revised lower the number of jobs lost in August and September.
The market has been expecting unemployment to top 10 percent before peaking. But the pace of job losses has accelerated and the rate is likely to go higher.
In midmorning trading, the Dow Jones industrial average rose 27.89, or 0.3 percent, to 10,033.85. The Standard & Poors 500 index rose 3.64, or 0.3 percent, to 1,070.27, while the Nasdaq composite index rose 10.24, or 0.5 percent, to 2,115.56.