Stocks Rise Slightly after Unemployment Hits 10.2%

NEW YORK, Nov 6 - U.S. stocks rose 3 percent for the week after ending Friday's session slightly higher, shrugging off government data showing the unemployment rate hit 10.2 percent -- the highest in 26-1/2 years.

U.S. employers cut a deeper-than-expected 190,000 jobs in October, the government said, and the unemployment rate rose more than forecast to 10.2 percent, the highest since April 1983.

"The headline number looks pretty good, relatively, but the 10.2 percent unemployment will be a shock for the market to digest," said Dan Cook, senior market analyst at IG Markets in Chicago.

Cook said 10 percent is mostly a psychological barrier, but "no recovery is possible until we get jobs back."

In a choppy session Friday, the market fell at the open and briefly turned positive after closer inspection of the report showed payroll losses kept declining and job losses for earlier months were revised lower.

Shares of bailed-out insurer American International Group Inc (AIG) dropped 10 percent to $35.40 in early trading after it said its main insurance business remained weak, even as it posted a second straight quarterly profit.

Shares of General Electric Co (GE) and online retailer Amazon.com Inc (AMZN) both rose after Bernstein upgraded both the stocks.

"Big-cap stocks are the ones with leverage issues, but they seem to have picked up a lot of interest from investors of late," said Tim Ghriskey, chief investment officer of Solaris Asset Management in Bedford Hills, New York.

"We're certainly seeing continued evidence of economic improvement -- except on the employment side -- but even there, perhaps we may have seen about the worst."

The Dow Jones industrial average gained 17.46 points, or 0.17 percent, to end at 10,023.42. The Standard & Poor's 500 Index rose 2.67 points, or 0.25 percent, to 1,069.30. The Nasdaq Composite Index added 7.12 points, or 0.34 percent, to close at 2,112.44.

For the week, both the Dow and the S&P 500 rose 3.2 percent, while the Nasdaq climbed 3.3 percent.

Volume was light on the New York Stock Exchange, with 1.08 billion shares changing hands, below last year's estimated daily average of 1.49 billion, while on the Nasdaq, about 1.84 billion shares traded, shy of last year's daily average of 2.28 billion.

Source: Reuters

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