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With everyone concerned about the economy, you'd think that good news on the employment front would trigger a big rally in stocks. But even after the Labor Department said that the economy had added 200,000 jobs in December, pushing the unemployment rate down to 8.5%, stocks initially dropped sharply.
But apparently, bullish investors saw the light later in the morning. After falling as much as 80 points during the session, the Dow Jones Industrials (INDEX: ^DJI ) recovered most of those losses by midday, with the average down just 22 points to 12,394 as of 12:15 p.m. ET. The S&P 500 was down less than 1 point at 1,280.
General Electric (NYSE: GE ) was one of the Dow's biggest gainers as of noon, with a rise of about 1%. The company, which made the Dogs of the Dow list for 2012 because of its high dividend yield, got a positive analyst recommendation from JPMorgan. The report cited GE's high-margin service business, healthy spending on research and development, and strong presence in growing emerging markets.
The biggest loser in the Dow was Alcoa (NYSE: AA ) , down about 2%. The company announced it would cut smelting capacity by about 12% by closing some of its facilities. But even though aluminum prices are down by more than a quarter from their highest levels last year, analysts don't expect the move to make a big impact on oversupply in the market.
Among sectors, tech stocks were mixed. Intel (Nasdaq: INTC ) fell about half a percent after getting downgraded by Sterne Agee. The analyst cited competition from ARM Holdings, whose rival chips are expected to appear on PCs running an ARM-compatible version of Microsoft's (Nasdaq: MSFT ) Windows 8 operating system. For its part, Microsoft seemed to benefit from the news. It was among the top gainers in the Dow, gaining more than 1%.
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