Market Recap: Jobs Report Gives Markets An Early Boost But Downgrades Send Stocks Lower

Markets closed mixed on Wall Street today: Dow 0.44%, S&P -0.82%, Nasdaq -1.10%, Oil +3.64%, Gold -0.82%.

On the commodities front, Oil (NYSE:USO) climbed to $82.81 a barrel. Precious metals were down, with Gold (NYSE:GLD) falling to $1,639.70 an ounce while Silver (NYSE:SLV) fell 2.48% to $31.21 an ounce.

Hot Feature: Did the Gold and Silver Plunges Shakeout the Weak?

Today’s markets were mixed because:

1) Jobs. A better-than-expected jobs report gave markets a boost in early trading. The U.S. Department of Labor announced this morning that the economy added 103,000 jobs in September, beating Wall Street’s expectations, while the report also upwardly revised an especially weak August reading. But despite the net increase in jobs in the U.S. over the last few months, job growth remains below what is needed to bring down the unemployment rate, which remained steady at 9.1% in September for the third straight month, just as analysts had expected. The unemployment rate has been hovering within close range of 9% since April 2009. Furthermore, part of last month’s gain was the result of roughly 45,000 unionized workers returning to Verizon (NYSE:VZ) following a strike. Still, payrolls were up over the prior two months by a cumulative 99,000.

2) Downgrades. While this morning’s jobs report gave markets an early boost, they soon reversed when Fitch downgraded the foreign and local currency ratings on Italy and Spain, the euro zone’s third- and fourth-largest economies. The news follows Moody’s decision to downgrade Italy by three notches on Tuesday, and comes on the same day that Moody’s cut the senior debt and deposit ratings of twelve financial institutions in the U.K. and nine in Portugal.

3) Banks. Bank stocks tumbled today after Dennis P. Lockhart, president of the Federal Reserve Bank of Atlanta, told a town hall gathering in Atlanta that regulators “can’t guarantee” against the failure of individual firms. One of yesterday’s best-performing stocks, Bank of America (NYSE:BAC) fell nearly 4% today, leading the financial sector lower. Also declining were JPMorgan (NYSE:JPM), Wells Fargo (NYSE:WFC), Morgan Stanley (NYSE:MS), Goldman Sachs (NYSE:GS), Barclays (NYSE:BCS), and Citigroup (NYSE:C).

BONUS: European Banks Selling $40B of Assets