Dec. 3 (Bloomberg) -- U.S. stocks rose, extending the biggest weekly gain in a month, as a rally in energy and metals producers after the dollar fell offset concern that slower-than-estimated growth in payrolls will hamper the economy.
Newmont Mining Corp. and Schlumberger Ltd. added at least 2.5 percent as the Thomson Reuters/Jefferies CRB Index of 19 commodities completed the largest weekly gain since 2009. DuPont Co. advanced 1.3 percent after Citigroup Inc. recommended buying the stock. Big Lots Inc. fell 5.1 percent after the seller of overstocked items cut its 2010 forecast. Nasdaq OMX Group Inc. slumped 2.7 percent after its stock rating was cut.
The Standard & Poor’s 500 Index advanced 0.3 percent to 1,224.71 at 4 p.m. in New York, reversing a 0.4 percent decline after Federal Reserve Chairman Ben S. Bernanke told CBS he doesn’t rule out expanding the central bank’s $600 billion program of spurring the world’s main economy with Treasury purchases. The Dow Jones Industrial Average increased 19.68 points, or 0.2 percent, to 11,382.09.
“The market is in a very manic-depressive phase,” said Wasif Latif, vice president of equity investments at USAA Investment Management Co., which oversees $45 billion in San Antonio. “While the jobs data was disappointing, all of the other figures came in pretty decently. That still tells me that we’re in a slow, but steady economic recovery. That’s still a good backdrop for investing in the equity market.”
The S&P 500 advanced 3 percent this week after a record increase in sales of existing homes, retail sales that topped projections and reports showed an expansion in Chinese and European manufacturing. The benchmark U.S. equity index has rallied 20 percent from its 2010 low in July as corporate profits improved and the Fed expanded its asset-purchase program to suppress interest rates and stoke the economic recovery.
Gauges of raw-materials and energy stocks in the S&P 500 were the best performing groups within 10 industries. Crude oil and metals prices rose as the U.S. dollar declined, boosting the appeal of commodities as an alternative investment.
The Dollar Index, which IntercontinentalExchange Inc. uses to track the greenback against the currencies of six major U.S. trading partners including the euro and yen, fell below 80 for the first time in a week. The gauge slid 1.5 percent to 79.13 at 4:42 p.m. New York time.
Newmont Mining, the largest U.S. gold producer, gained 3.1 percent to $62.36. Schlumberger, the biggest oilfield services provider, added 2.5 percent to $82.74.
DuPont advanced 1.3 percent to $49.24 for the second-biggest gain in the Dow average. The third-largest U.S. chemical maker was raised to “buy” from “hold” at Citigroup, which cited strength in its electronics products.
Some casino companies advanced as three U.S. House Republicans said the Senate may try to pass legislation that would legalize and tax some Internet gambling before Congress adjourns this year. Boyd Gaming Corp. rose 6.2 percent to $9.77. Scientific Games Corp. gained 9 percent to $8.64. International Game Technology climbed 5 percent to $16.33 for the biggest advance in the S&P 500.
“The fact that stocks rallied despite a bad jobs report is a good indication,” said Michael Holland, who oversees more than $4 billion as chairman of Holland & Co. in New York. “People are starting to get focused on the other economic data points that show that the economy is going to surprise positively. It’s a reason to buy into the rally. It’s a bad place for anyone who’s betting against stocks.”
Stocks pared losses earlier today after a gauge of service industries expanded at the fastest pace in six months. The Institute for Supply Management’s non-manufacturing index, which covers about 90 percent of the economy, rose to 55 last month from 54.3 in October. A reading higher than 50 signals growth.
The Dow fell as much as 0.4 percent today after the Labor Department said U.S. payrolls increased by 39,000 last month, trailing the median economist projection in a Bloomberg News survey for an increase of 150,000 jobs. The jobless rate rose to 9.8 percent from 9.6 percent.
Bill Gross, manager of the world’s largest bond fund at Pacific Investment Management Co., said the Fed is unlikely to raise interest rates for several years with employment growing less than forecast. He spoke in a radio interview on “Bloomberg Surveillance” with Tom Keene.
“It’s a glacial recovery for the jobs market,” said Chad Morganlander, a Florham Park, New Jersey-based money manager at Stifel Nicolaus, which has $90 billion in client assets. “Today’s figures were surprising especially in light of the better figures we’ve had this week. That only tells me that one will still have to keep a very careful eye at this stage.”
Big Lots, Nasdaq, EBay
Big Lots lost 5.1 percent, the most since Nov. 4, to $29.50. The seller of overstocked items cut its earnings forecast for 2010 to no more than $2.81 a share. The company previously projected at least $2.82 a share.
Nasdaq sank 2.7 percent to $22.63. The owner of the second-largest U.S. stock exchange was cut to “hold” from “buy” at Stifel Nicolaus & Co., which said the stock is expensive relative to the S&P 500. The stock rose 22 percent through yesterday since the company reported quarterly results on July 27, compared with a 9.6 percent gain for the U.S. equity benchmark gauge.
EBay Inc. fell 1 percent to $29.61. The owner of the second-most visited U.S. e-commerce site was cut to “hold” from “buy” at Citigroup, which cited valuation. The shares have risen 43 percent since the end of July through yesterday, compared with an 11 percent gain for the S&P 500.
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