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The pullback at the opening bell came as traders digested a report from the Labor Department showing that employment fell by more than expected in the month of October, pushing the unemployment rate up to a new twenty-six year high above 10 percent.
In related news, President Barack Obama signed a bill extending unemployment coverage for 14 weeks across the country and adds an additional six weeks for areas with the highest unemployment. The bill also lengthens the $8,000 first-time homebuyer tax credit and expands it to include a $6,500 credit for people who have lived in their current homes for at least five years.
Also on the economic front today, the Commerce Department released its report on wholesale inventories in the month of September, showing that inventories fell by a little less than economists had been anticipating. The report also showed a continued increase in wholesale sales.
This afternoon, the Federal Reserve's consumer credit report for September may also attract some attention as traders look to see if there has been a slowdown in the decline in outstanding consumer credit. Economists expect consumer credit to shrink by $10 billion. The report is due to be released at 3 p.m. ET.
The major averages have moved roughly sideways in recent trading, hovering modestly above the unchanged line. The Dow is currently up 24.56 at 10,030.52, the Nasdaq is up 6.60 at 2,111.92 and the S&P 500 is up 3.01 at 1,069.64.
Sector News
Airline and gold stocks are continuing their strong outing in early afternoon trading, with the NYSE Arca Airlines Index and the NYSE Arca Gold Bugs Index advancing by 4.8 percent and 2.7 percent, respectively. With the gains, the indices are continuing to recover from recent lows.
The gains by airline stocks have come amid a decrease by the price of oil, while gold stocks are rallying due to a jump in the price of the precious metal, which set a record intraday high earlier in the session.
Railroad stocks are also posting strong gains, as reflected by the 1.7 percent gain being shown by the Dow Jones Railroads Index. With the gain, the index is rising for the fifth straight session and has set a one-year intraday high.
On the downside, healthcare provider and commercial real estate stocks continue to turn in some of the day's worst performances with the Morgan Stanley Healthcare Provider Index and the Morgan Stanley REIT Index falling by 1.7 percent and 1.4 percent, respectively.
Stocks In The News
Crocs Inc. (CROX | Quote | Chart | News | PowerRating) is plunging in early afternoon trading after comments from CEO John Duerden indicated seasonality would negatively impact the firm's fourth quarter results. The decline comes despite the company's strong third quarter results, which topped estimates. The stock has dropped by 15.6 percent, setting a three-month intraday low earlier in the session.
Red Robin Gourmet Burgers Inc. (RRGB | Quote | Chart | News | PowerRating) is also moving notably lower following news that the company's third quarter revenues of $187.0 million fell short of the $197.54 million expected by analysts. The stock is currently down by 12.5 percent, falling to its worst intraday price in over seven months.
On the other hand, NVIDIA Corp. (NVDA | Quote | Chart | News | PowerRating) is advancing after the company reported third quarter earnings of $0.19 per share, firmly beating the estimate of $0.10 per share. The stock has jumped by 7.6 percent, moving further off of last week's three-month closing low.
In Focus: Economic News
As mentioned above, the Commerce Department revealed that non-farm payroll employment fell by 190,000 jobs in October following a revised decrease of 219,000 jobs in September. Economists had expected a decrease of about 175,000 jobs compared to the loss of 263,000 jobs originally reported for the previous month.
With the continued drop in jobs, the unemployment rate jumped to 10.2 percent in October from an unrevised 9.8 percent in September. The unemployment rate had been expected to show a more modest increase to 9.9 percent.
In a separate report, the Commerce Department reported that wholesale inventories fell by 0.9 percent in September following a 1.3 percent decrease in August. Economists had been expecting inventories to decrease by about 1.0 percent.
Other Markets
In overseas trading, stock markets across the Asia-Pacific region closed higher on Friday. Japan's benchmark Nikkei 225 Index rose by 0.7 percent, while Hong Kong's Hang Seng Index advanced 1.6 percent.
Meanwhile, the major European markets saw little change on the day, with the U.K.'s FTSE 100 and the German DAX Index edging up by 0.3 percent and 0.1 percent, respectively, while the French CAC 40 Index slid by less than a tenth of a percent.
In the bond markets, treasuries are modestly higher. The benchmark ten-year note, which moves opposite of its price, is trading at 3.507 percent, posting a loss of 2.6 basis points on the session.
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