On Wall Street, leading indices rose more than 2 percent on Friday, despite news of a spike in the unemployment rate to its highest level in 14 years, as investors assessed that stocks are currently undervalued.
The Dow Jones index rose by 248 points or 2.85 percent, to 8,943 points, while the S&P index gained 2.89 percent, reaching 930 points. The Nasdaq index, on the other hand, increased by 2.41 percent, to 1,647 points. In October, 240,000 Americans lost their jobs, causing the unemployment rate to jump from 6.1 to 6.5 percent, the highest level since 1994. This is significantly higher than analysts’ estimates, who expected 200,000 layoffs and an unemployment rate of 6.3 percent. Nevertheless, this did not negatively impact Wall Street, nor did the fact that in September the number of existing home sales fell by 4.5 percent, while a decline of 3 percent was expected, indicating further decreases in consumption and heralding a further drop in home prices.
"Essentially, the market rose because most of this bad news was already priced into stocks," says Michael Sheldon, a strategist at RDM Financial. However, many investors remained on the sidelines, resulting in very thin trading volume. Only about 1.26 billion shares changed hands yesterday, while last year’s daily average was 1.9 billion. Among the biggest winners was the oil sector, thanks to the price of ‘black gold’ managing to stay above the psychologically important level of $60 per barrel. Thus, Exxon Mobil’s stock rose more than 6 percent, and Chevron’s more than 4.5 percent. Stocks in defensive sectors, such as pharmaceuticals and utilities, also increased, while a decline was recorded in the automotive sector after General Motors and Ford reported larger-than-expected losses in the past quarter.
