Market Recap: Stocks Jump on Jobs

Markets closed up on Wall Street today:

• Dow +1.23 percent
• S&P +1.46 percent
• Nasdaq +1.61 percent
• Oil +1.43 percent
• Gold -1.77 percent

On the commodities front:

• Oil (NYSE:USO) rose to $97.74 a barrel
• Gold (NYSE:GLD) fell to $1,728.20 an ounce
• Silver (NYSE:SLV) down 1.64 percent to settle at $33.62

(Related: Obama Administration to Shut Down Fannie and Freddie)

Today’s markets were up because:

1) Jobs: The Labor Department today lowered the U.S. unemployment rate by two-tenths of a point to 8.3 percent, the lowest it’s been since February 2009. January data showed non-farm payrolls to have risen a whopping 243,000, wildly exceeding even the most optimistic of economists’ projections.

However, as mentioned earlier on The Blaze in the Morning Market Roundup, there are some figures to keep in mind before one gets too ecstatic about the Labor Department’s new numbers.

Via Zero Hedge:

A month ago, we joked when we said that for Obama to get the unemployment rate to negative by election time, all he has to do is to crush the labor force participation rate to about 55%. Looks like the good folks at the BLS heard us: it appears that the people not in the labor force exploded by an unprecedented record 1.2 million. No, that’s not a typo: 1.2 million people dropped out of the labor force in one month! So as the labor force increased from 153.9 million to 154.4 million, the non institutional population increased by 242.3 million meaning, those not in the labor force surged from 86.7 million to 87.9 million. Which means that the civilian labor force tumbled to a fresh 30 year low of 63.7% as the BLS is seriously planning on eliminating nearly half of the available labor pool from the unemployment calculation. As for the quality of jobs, as withholding taxes roll over Year over year, it can only mean that the US is replacing high paying FIRE jobs with low paying construction and manufacturing. So much for the improvement.

2) Services: The January installment of the Institute for Supply Management’s services index rose to 56.8, from a revised 53.0 in December, the highest level since February 2011. The services sector was shown to have expanded at a faster rate last month, boosted by new orders, while the ISM’s employment index rose from 49.8 in December to 57.4 in January, the highest level in six years.

3) Financials. Bank of America, Wells Fargo, JPMorgan and Goldman Sachs led today’s rally despite being named in major lawsuits today. Goldman is alleged to have defrauded investors in a 2006 offering of mortgage-backed securities, while the former three have been accused by New York Attorney General Eric Schneiderman of fraudulently using an electronic mortgage database to avoid the need for recording mortgage transfers. Citigroup and Morgan Stanley also joined in the rally, each rising more than 3 percent.

[Editor’s note: portions of the above originally appeared on Wall St. Cheat Sheet.]