CLOSING BELL

Dow 10012.00  +10.00, Nasdaq 2141.00  +16.00, S&P 1066.00  +3.00 

The increased volatility seen over this week has stemmed from sovereign debt concerns centered on fiscally troubled European nations such as Portugal, Spain, Greece, Ireland, Iceland, Ukraine and now Italy.  This uncertainty pressured overseas markets over the past two days, and resulted in stronger dollar. 

The US dollar has played a key role in the market action of the past two days.  Dollar-denominated assets – the stock market, commodities, Gold, Oil all have exhibited a strong inverse relationship with the currency.  This was evident in this afternoon's strong rebound, as the dollar fell from 6-month highs in the dollar index.  This caused a sharp short-covering rally that erased triple-digit losses in stocks. Technical levels have also played a role in the end-of-week action, with the S&P 500 managing to hold its 200-day exponential moving average after slicing through key support levels yesterday. 

The important nonfarm payroll report was released this morning.  The report showed that nonfarm payrolls fell by 20,000 in January, which was a disappointment since the consensus had called for the addition of 15,000 jobs during the month. The December report was also revised downward to reflect a loss of 150,000 jobs. 

The unemployment rate also fell to 9.7% from 10.0%. It’s important to note, that even with additional job losses the unemployment rate declined.  This is because even though more people are losing their jobs, people that have been unemployed for longer periods of time have not stopped looking for employment.

Looking to next week, earnings season will continue but there are fewer major names scheduled to report.  Only two Dow components Walt Disney (DIS) and Coca Cola (KO) are due to report during the week.  

Volatility could remain elevated as the market continues to digest macro economic factors and growing uncertainty about the global recovery