NEW YORK — Stocks will enter the month of December with a sense of optimism that much of the dismal environment for corporate profits has already been discounted by the market, even as upcoming reports, including the key jobs report on Friday, are expected to show the economic picture is still worsening.
Next week, “we’ll have a slew of economic numbers, including what I expect to be a rise to 6.7 percent in unemployment in November,” said Peter Cardillo, market economist at Avalon Partners.
However, “the market has already priced in another quarter or two of real bad economic news, and things could start to stabilize in the second quarter” of next year, he said.
The market gained on so-called Black Friday, marking its fifth-straight session of gains, with grim prospects for retailers failing to dent optimism at the traditional start of the U.S. holiday-shopping season.
The Dow Jones industrial average finished up 102.43 points, or 1.2 percent, at 8,829.04. While the blue-chip average fell 5.3 percent for the month of November, it jumped 9.7 percent over the past week.
Even more impressive, the Dow gained 1,277 points, or 17 percent, in just five sessions, marking its best five-day percentage gain since 1932, and its best five-day point gain on record.
The S&P 500 Index rose 8.56 points, or 1 percent, to 896.24 Friday. The broad index fell 7.5 percent in November, but it surged 12 percent for the week.
The Nasdaq Composite Index gained 3.47 points, or 0.2 percent, to 1,535.57. The technology-heavy index jumped 11 percent for the week and had a monthly loss of 10.8 percent.
A turning point for the market seemed to start a week ago, with the market gaining more confidence as President-elect Barack Obama began unveiling his economic team. On Wednesday, Obama appointed former Federal Reserve Chairman Paul Volcker to head a newly created White House advisory post.
“The pool of people the president-elect has chosen has been greeted well,” said Ken Tower, market strategist at Quantitative Analysis Service. “Restoring confidence is an important step for the markets and the economy.” Adding to the positive tone, the government stepped in to bail out Citigroup Inc., which allowed shares of the ailing bank to rebound 120 percent over the past week after plunging below $4 amid fear about its future.
And continued hopes for a bailout of the U.S. auto industry also helped shares of General Motors Corp. to rebound more than 70 percent.
On Tuesday, GM, Ford Motor Co., Chrysler and other automakers will post what are again expected to be dismal U.S. sales for the month November.
Over the past week, the Federal Reserve also announced it would spend $800 billion to buy debt in order to lower borrowing costs for consumers and home buyers.
