Stocks rallied during the session after data showed the economy added 114,000 jobs in September, and the unemployment rate fell to 7.8%, its lowest level since January 2009. Strong trades in the chip category helped the tech sector. Meanwhile, Zynga dropped 11.9% after the co. cut its 2012 outlook, with Facebook , which gets a portion of its revenues from Zynga fees, also sliding 4.7%. Also, Apple dropped 2.1%, weighing on the Nasdaq. Hewlett-Packard lost 1.4% after Sterne Agee cut its rating to neutral, citing uncertainty at the tech giant. Investors eyed the start of third-quarter earnings season on Tuesday when aluminum giant Alcoa will report results. Third-quarter earnings season is expected to be the worst season since the fourth quarter of 2009 with an expected 2.7% drop in earnings for the S&P 500 and flat year-over-year revenue. 78% of S&P 500 companies that provided an earnings outlook, 80 out of 103, have said they will miss the Wall Street consensus. A slowdown of growth in China along with Europe’s recession and fiscal woes are expected to have put a dent in international revenue for most multinational firms. Also, European finance ministers are expected to tell the United States to get its own fiscal house in order and deal with the so-called fiscal cliff at a G7 meeting in Tokyo. Economic reports due out next week include wholesale inventories and the trade deficit for August, federal budget and the producer price index for September, consumer-sentiment, Fed’s Beige Book. J.P. Morgan Chase and Wells Fargo give their results on Friday, financial companies are expected to have 10% earnings growth, the highest rate in the recent quarter. Also, earnings are scheduled from Costco Wholesale, Fastenal and Safeway. Implied volatility inched higher on moderate trading volumes.
