Happy days are here again, well at least for the moment. Stocks exploded higher and then maintained their gains throughout the session on a surprisingly strong jobs report. Nonfarm payrolls jumped 243,000 in January, which was 100,000 higher than forecast. There were also 60,000 jobs added to the November and December reports. This brought the unemployment rate down to 8.3%, the lowest in three years. The underemployment rate remains stubbornly high at 15.1%. Investors had more good news when the ISM Service report came in at 56.8. This was a jump from 53 last month and an expected level of 53.2. This number represents the bulk of purchases for the U.S. economy, so this was a very good economic sign. Factory orders grew 1.1% in December.

The gains today put the Dow average at a 3 ½ year high. The NASDAQ last saw these levels about 11 years ago. Volume was again light at less than 900 million shares.

In Greece, negotiations continue over the debt restructuring. It again appears that there is progress but still no final deal. The ECB is providing more support. Meetings are continuing and some are suggesting that they are entering the final phase.

In Washington, the debate over extending the payroll tax cut continues in conference. So far there has been no breakthrough and some Senators are talking about a backup plan.

Long Treasury bonds took it on the chin as holders wonder whether the Fed will need to continue with its bond buying program if the economy continues its recovery. The long Treasury fell 2 ½ points taking the yield to 3.13%. The ten year saw its yield jump to 1.93%. As for commodities, precious metals were lower while most other commodities moved higher.

All sectors were higher with financials gaining nearly 3%. Capital market and regional banks had a very good day. The recovery continues for Citigroup and Bank of America as both gained 5%. Consumer discretion, tech, and industrials gained 2%. The leading stocks were Genworth, up 14%; Gilead, up 11%; and Tenet Health up 10%. Edwards Life Sciences fell 11% for the largest loss.

Next week is a very light week for economic data. There is still a heavy earnings calendar. Humana and Loews report on Monday.

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