U.S. Markets Shook Off Poor Economic Data To Rally On Friday

November 7, 2008 6:26 p.m. EST

New York, NY (AHN) - U.S. markets shook off dismal unemployment data and weak earnings results from the auto industry as all three major indices rallied on the day Barack Obama made his first speech as President-elect.

The October unemployment rate was released before the markets opened. The 6.5 percent rate marked the highest level of unemployment in 14 years. However, riding on the strength of overseas markets, the U.S. indices opened the session higher.

Markets held solid gains heading into President-elect Barack Obama's first speech. Obama touched on many subjects but made it very clear that an economic stimulus package would be his first order of business if one was not completed in the lame-duck session.

The Dow Jones Industrial average rose 248 points or 2.9 percent. 28 of 30 Dow components rose on Friday.

Alcoa, up 9.8 percent was the strongest Dow component. The aluminum giant received a boost when NASA said the company's Davenport, Iowa facility was the only U.S. supplier to produce the quality alloy it needs for the new Ares 1 launch vehicle.

The S&P 500 added 26 points or 2.5 percent. The financial sector, which lagged most of the session, rallied to close 2 percent higher. The sector felt pressure from Goldman Sachs, down 3.6 percent after an analyst at JP Morgan cut earnings estimates for the bank.

Tech was strong with the Nasdaq Composite rising 38 points or 2.4 percent. Microsoft added a boost, up nearly 3 percent after the software giant said it is not interested in acquiring Yahoo.

In corporate news, General Motors reported a $2.5 billion third quarter loss and said it may not have enough cash to operate come mid-2009 if they do not receive government aid.

Ford also reported an ugly third quarter, posting a $129 million third quarter loss and announcing it will cut 10 percent of its workforce.

Crude oil stabilized a bit, rising 27 cents a barrel to settle at $61.04 on the New York Mercantile Exchange.

As for other economic data, September pending home sales fell 4.6 percent, larger than economists had expected, to a reading of 89.2. Pending home sales are when the seller has accepted an offer but the closing house not yet be done.