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Benchmarks discounted the mixed jobs data on Friday to eke out modest gains that were sufficient to guide the Dow and S&P 500 to record highs. The jobs report showed that pace of hiring decreased in July. However, the unemployment rate declined to its lowest level since Dec 2008. Mixed jobs numbers may make the Federal Reserve more careful about trimming its bond buying program in the future. Meanwhile, factory orders for the month of June increased for the third consecutive month. While the consumer discretionary sector emerged the biggest gainer among the S&P 500 industry groups, industry heavy-weight Chevron’s dismal earnings dragged the energy sector to be the worst performer.   

For a look at the issues currently facing the markets, make sure to read today’s Ahead of Wall Street article.           

The Dow Jones Industrial Average (DJI) gained 0.2% to close the day at 15,658.36. The S&P 500 increased 0.2% to finish Friday’s trading session at 1,709.67. The tech-laden Nasdaq Composite Index gained 0.4% to end at 3,689.59. The fear-gauge CBOE Volatility Index (VIX) tumbled 7.4% to settle at 11.98. Consolidated volumes on the New York Stock Exchange, American Stock Exchange and Nasdaq were roughly 5.68 billion shares, lower than 2013’s average of 6.4 billion shares. Advancing stocks outnumbered the decliners. For the 52% shares that advanced, 45% declined.

Disappointing non-farm payrolls numbers initially dragged the major indices into the red. However, stocks trimmed those losses in the later part of the day to finish modestly higher. According to the U.S Department of Labor, non-farm payroll employment rose by 162,000 in July as against expectations of 183,000 gains. June’s figure was revised down to 188,000 from 195,000. Nonetheless, unemployment rate hit its lowest level in more than four years as it dropped to 7.4% from June’s 7.6%. Employment increased in retail trade, food services and drinking places, financial activities, and wholesale trade.       

Going further into the details of non-farm payroll employment report, jobs in retail trade increased 47,000; whereas employment in financial activities rose by 15,000. Wholesale trade and professional and business services added 14,000 and 36,000, respectively. Employment in manufacturing and health care was essentially unchanged in July. The Fed will now assess the July employment numbers while deciding the right time to trim its bond buying program. Most experts expect the central bank to start scaling back its stimulus program in September.       

Meanwhile, the U.S Department of Commerce reported that new orders for U.S factory goods increased 1.5% in June after increasing 3% in May. May’s figure was upwardly revised to 3% from the previous estimate of 2.1%. This figure was below the consensus estimate of 2.2%. Pace of manufacturing decelerated due to tight fiscal policy and poor global demand.     

On the earnings front, Chevron Corporation (NYSE:CVX) reported its second quarter results on Friday.  The company’s earnings came in below the Street’s estimates. Chevron’s earnings declined 26% in the second quarter due to higher costs and low demand for crude oil and refined products. The company’s second quarter net income declined to $5.37 billion from the year-ago figure of $7.21 billion. Shares slipped 1.2% after the announcement of its quarterly results. According to Thomson Reuters data, 391 companies of the S&P 500 companies have reported their quarterly results, among which 67.8% outpaced earnings estimates. Around 55% of these companies have reported revenues above the Street’s estimates

Energy sector was the biggest loser among the S&P 500 industry groups. Energy Select Sector SPDR (XLE) lost 0.4%. Stocks such as Exxon Mobil Corporation (NYSE:XOM), Hess Corp. (NYSE:HES), Marathon Petroleum Corp (NYSE:MPC) and Valero Energy Corporation (NYSE:VLO) slipped 0.8%, 1.0%, 4.2% and 2.7%, respectively.

The consumer discretionary stocks were the best performers on Friday and the Consumer Discretionary SPDR (XLY) added 0.7%. Stocks such as The Walt Disney Company (NYSE:DIS), News Corp (NASDAQ:NWSA), Time Warner Inc (NYSE:TWX) and DISH Network Corp (NASDAQ:DISH) gained 1.8%, 0.8%, 2.0% and 0.85%, respectively.

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