MarketView for November 2

Summary

The financial markets ended an unusual storm-shortened trading week with a selloff on Friday, as major indexes erased early gains provided by a stronger-than-expected payrolls report. Energy stocks were a drag on the market after Chevron posted earnings that missed expectations. The stock fell 2.9 percent to $108.26 and was one of the worst performing members of the Dow Jones Industrial Average. The dollar's strength also hurt energy and materials shares. Eventually, all 10 S&P 500 sectors succumbed to selling pressure to end lower.

For the week, the Dow was down 0.1 percent; however the S&P 500 gained 0.2 percent, while the Nasdaq ended the week down 0.2 percent. Keep in mind that the trading week was shortened by a historic two-day market closure on Monday and Tuesday, spurred by super storm Sandy's devastating sweep through the Northeast.

From New York City's Staten Island to the popular beach towns of the Jersey Shore, rescuers and officials continued on Friday to face widespread destruction wrought by Sandy, as well as a rising death toll and frustration over delayed relief and fuel shortages.

Government data showed employers added 171,000 people to their payrolls last month, topping expectations. The jobless rate ticked up to 7.9 percent as more workers restarted job searches, a positive signal for the economy.

The jobs report is the last one before the U.S. presidential election on Tuesday, and it could improve President Barack Obama's odds at the ballot box, though polls continue to indicate a close race between Obama and Republican candidate Mitt Romney.

Chevron also was the second-largest weight on the S&P 500. The S&P energy index, down 1.7 percent, was one of the worst performers among the 10 major S&P 500 sector indexes. Strength in the dollar was also cited for a decline in crude prices, which hurt energy shares as well.

The S&P materials index fell 2 percent, pulled lower by a slide of 8.4 percent in Newmont Mining to $48.74 after its profits missed expectations.

According to Thomson Reuters data through Friday, of the 378 companies in the S&P 500 that have reported earnings so far, 61.9 percent have topped expectations, in line with the 62 percent quarterly average since 1994.

The revenue picture is much bleaker, with only 38.2 percent of companies having posted revenue above expectations, well below the 62 percent quarterly average since 2002 and the 55 percent average over the past four quarters.

The S&P 500 index is down 3.5 percent from a recent peak on September 14, and is below its 50-day moving average, amid investor caution ahead of the election and tough government budget negotiations at the end of the year.

Starbucks was up 9.1 percent to $50.84 after raising its earnings forecast for the fiscal year as sales in the United States, its top market, exceeded expectations, providing the company optimism that has eluded much of the U.S. restaurant industry in recent months.

Restoration Hardware shares soared 29.6 percent to $31.10 in their market debut after the upscale furniture retailer's initial public offering was priced at the high end of the expected range. The shares hit an intraday high at $33.15 - up 38.1 percent from the IPO price of $24.

Verizon said it expected fourth-quarter results to be hurt significantly due to super storm Sandy, but could not estimate the effect at this time. The stock slid 1.4 percent to$44.52.

Volume was modest, with about 6.35 billion shares changing hands on the three major equity exchanges, slightly below the daily average of 6.5 billion shares for the year so far.