Market Wrap for Friday, February 1: Stocks Surge on Jobs Data

The Dow Jones Industrial Average closed Friday's trading session near 5 year highs as investors continue to pour money into equities to start the year. Relatively good economic data and healthy corporate earnings helped propel the major averages. A surging euro currency is also giving investors confidence that the worst is over for the debt-stricken continent whose problems have weighed on U.S. markets in recent years.

Major Averages

The Dow Jones Industrial Average surged 149 points, or 1.08 percent, to 14,010.

The S&P 500 rose 15 points, or 1.01 percent, to 1,513.

The Nasdaq Composite led the major averages with a 37 point, or 1.18 percent, gain on the session.

Nonfarm Payrolls

The markets were buoyed by a nonfarm payrolls report which showed that the U.S. economy added more jobs than previously estimated for the last two months of 2012. Although employment figures for January came in below expectations, the November and December numbers were revised upward by 86,000 and 41,000, respectively.

In January, payrolls rose by 157,000 after increasing by an upwardly revised 196,000 in December. This was below consensus estimates of 180,000 but investors were enthusiastic about the revisions for November and December. Furthermore, the data showed that for all of 2012 there were 335,000 more jobs added than had been originally reported.

Private nonfarm payrolls rose by 166,00 jobs in January versus an increase of 202,000 in December. This was also below expectations of a 193,000 job gain for the month. The unemployment rate ticked up from 7.8 percent to 7.9 percent in January. Economists had projected that the unemployment rate would fall to 7.7 percent.

University of Michigan Consumer Sentiment

The final reading for the University of Michigan Consumer Sentiment index was revised higher to 73.8 versus a preliminary reading of 71.3. This was ahead of consensus estimates calling for an increase to 71.4. The figures show that a collapse in December when the index fell from 82.7 in November to 72.9, was likely not the beginning of a trend.

ISM Index

Investors were also heartened by a strong ISM Manufacturing report. The index showed an expansion in manufacturing activity in January, rising from 50.2 in December to 53.1. Economists had projected that the reading would only increase slightly to 50.5.

Construction Spending

The December construction spending report showed improving economic conditions in recent months. The index rose 0.9 percent after increasing 0.1 percent in November. Private construction spending jumped 2 percent in the month after recording a modest 0.2 percent gain in November.

Commodities

Despite a strong move higher in stocks, WTI crude was only slightly higher on the day. NYMEX crude contracts, the U.S. benchmark, were up just 0.16 percent to $97.65 late in the day. Brent contracts, however, had climbed almost 1 percent to $116.60. Natural gas futures were last trading down 1.26 percent to $3.30.

COMEX gold futures had risen around 0.50 percent to $1,670 late on Friday. Silver contracts were last trading up almost 2 percent to just under $32 while copper futures were up almost 1.40 percent on the session.

Despite a risk on environment in the equity market, both corn and wheat futures lost ground on the day. Corn was last down 0.61 percent while wheat futures had lost almost 2 percent. Soft commodities were unchanged to moderately higher across the board.

Bonds

The iShares Barclays 20+ Year Treasury Bond ETF (NYSE:TLT) recorded a sharp 1.30 percent loss on Friday and closed at $115.54. The ETF actually opened the day higher, but fell throughout the session as money came out of bonds and moved into stocks.

At the front-end of the curve, yields were unchanged with the 2-Year Note yield holding steady at 0.27 percent. The 5-Year yield rose one basis point to 0.87 percent.

The 10-Year Note and 30-Year Bond yields rose four and six basis points to 2.02 percent and 3.21 percent, respectively.

Currencies

The U.S. dollar was slightly weaker on Friday. The PowerShares DB US Dollar Index Bullish ETF (NYSE:UUP), which tracks the performance of the greenback versus a basket of foreign currencies, lost 0.09 percent to $21.60.

The EUR/USD continued to surge, adding 0.59 percent to $1.3662 on the day. Conversely, the Yen continued to plunge versus the greenback as the USD/JPY jumped 1.08 percent to 92.7400. The other notable currency mover was the GBP/USD which had lost 0.86 percent at last check.

Volatility and Volume

The VIX plunged amid the big rally in stocks. The widely watched volatility index lost around 9.50 percent to 12.92 and is back near 52-week low levels as volatility expectations remain muted.

Despite the bullish activity in the market, volume remained light. Only around 109 million SPDR S&P 500 ETF (NYSE:SPY) shares traded hands compared to a 3-month daily average of over 137 million.

Stock Movers

Shares of Brightcove (NASDAQ:BCOV) fell more than 27 percent after the company's full-year and first-quarter outlook failed to meet Wall Street expectations.

Anheuser-Busch InBev (NYSE:BUD) rose better than 4 percent a day after tehe stock fell due to a Justice Department lawsuit seeking to block the company's acquisition of Grupo Modelo.

Medical-device company Abaxis (NASDAQ:ABAX) jumped more than 14 percent on stronger than expected third-quarter earnings results.

Brink's (NYSE:BCO) lost around 7 percent after the company's fourth-quarter earnings missed analyst's expectations.

Carbo Ceramics (NYSE:CRR) surged almost 9 percent on the back of strong fiscal fourth-quarter results.

Universal Display (NASDAQ:PANL) jumped over 10 percent on unconfirmed market chatter suggesting a takeover of the company may be in the works.

GNC Holdings (NYSE:GNC) fell almost 7 percent on Friday after being downgraded by analysts at William Blair.