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Unemployment's down, jobs are up, and the economy's looking sharp after a strong report today that sent the Dow Jones Industrial Average (DJINDICES:^DJI) surging to big gains to close the week. Every single one of the Dow's blue-chip member stocks has jumped into the green today, and the index has climbed to a 186-point explosion as of 2:30 p.m. EST, led by a giant day from Intel (NASDAQ:INTC). But is today's surge really justified? Let's dive into what you need to know.
Unemployment falls to a five-year low
Another 203,000 jobs cropped up in the United States in November, according to today's report from the Department of Labor. While seasonal hiring for the holidays always boosts late-year employment numbers, more Americans were looking for jobs in the month and the unemployment rate decreased to 7% overall -- its lowest figure since 2008.
Although some economists remain cautious about the report's view of the American economy, pointing out that long-term unemployment figures didn't budge between October and November, businesspeople and professionals, as well as other higher-paying jobs, marked a significant gain for the month. That's a big sign of progress for the economy, particularly as many observers have pointed to increased part-time and low-skilled hiring in the recent past as responsible for some of the unemployment rate's drop over the last few years.
While stocks are moving on up across the board, Intel's putting on an especially big show today. Shares jumped 2.8% after Citigroup upgraded the stock from neutral to buy before the market opened. Analyst Glen Yeung noted that Intel's cautious guidance next year for its chips could pay off in the company beating expectations, even with the PC market continuing its free fall of recent quarters.
That might be good for Wall Street, but it's hard to say that average investors should be elated by today's bounce. Regardless of what the PC market does, Intel needs to pivot away from its reliance on this declining industry. Intel's PC Client Group still made up nearly 63% of total sales through the first nine months of the year, and considering that it saw revenue fall nearly 6% year over year during that time, even an earnings beat won't help support Intel's financials. The company's move toward opening up its contract manufacturing for other chip makers to utilize Intel's unrivaled manufacturing and facilities should help the company's future somewhat. However, Intel desperately needs to make more of a move into high-growth areas, whether that's data centers and servers or the mobile market.
Disney's (NYSE:DIS) is up around 1.4% so far today. Disney investors are riding high after the entertainment behemonth announced a 15% hike in its annual dividend earlier this week, part of the payoff of this company's explosive 43% year-to-date run-up.
The future only looks bright at the House of Mouse, particularly with a big lineup of openings expected across its business segments in coming years. 2015 will be a year to watch in particular for Disney shareholders, as it not only will mark Disney's first box office foray into the recently acquired Star Wars universe, but also see the launch of the sequel to last year's The Avengers -- a film that pulled in more than $1.5 billion at the worldwide box office during its theatrical run -- and the planned opening of the newest Disneyland theme park in Shanghai, China. It's an exciting future for Disney and its investors, and 2013's big gain might only be the opening act for this giant.