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Benchmarks closed in the green on Friday as lesser-than-expected job additions eased concerns that the Federal Reserve might tighten monetary policies soon.
The Dow Jones Industrial Average (DJI) rose 179.35 points, or 0.5%, to close at 34,756.39 and the S&P 500 gained 37.04 points, or 0.9%, to close at 4,229.89. The Nasdaq Composite Index closed at 13,814.49, adding 200 points, or 1.5%. The fear-gauge CBOE Volatility Index (VIX) decreased 9%, to close at 16.42. Advancing issues outnumbered declining ones for 2.03-to-1 ratio on the NYSE, while a 1.54-to-1 ratio on the Nasdaq favored advancers.
The tech-laden Nasdaq rallied 1.5% as investors focused on tech and growth funds more. Big tech companies like Microsoft Corporation (MSFT - Free Report) closed 2.1% higher, while Facebook, Inc. and Netflix, Inc. (NFLX - Free Report) closed at least 1% higher. Nasdaq’s highest gainer was DocuSign, Inc. (DOCU - Free Report) , gaining 19.8%, followed by Moderna, Inc. (MRNA - Free Report) , Biogen Inc. (BIIB - Free Report) and Tesla, Inc. (TSLA - Free Report) that added at least 4.6% on Friday.
Of the 11 major sectors of the S&P 500, only the utilities sector closed in the red declining 0.2%. the technology and communication services sectors were among the highest gainers rising 1.9% and 1.4%, respectively.
On Friday, the S&P 500 posted 57 new 52-week highs and no new lows, while the Nasdaq Composite recorded 112 new highs and 20 new lows. A total of 9.9 billion shares were traded on Jun 4, lower than the last 20-session average of 10.7 billion.
Unemployment Rate Shrinks in May
On Friday, the U.S. Bureau of Labor Statistics reported that the unemployment rate declined by 0.3 percentage point to 5.8% in May, higher than the consensus estimate of 5.9%. However, nonfarm payroll employment rose by 559,000 last month, falling short of the consensus estimate of 650,000 job additions. The number of new job additions in April was also revised to 278,000 from 266,000.
New jobs created in May were across businesses that suffered the biggest declines during the pandemic, employment is those areas are rising as restrictions are being lifted. Restaurants added 186,000 new jobs in May, as more restaurants were allowed to operate indoor & outdoor dining facilities and relaxed restrictions on wearing masks. There were significant job additions across hotels, museums, parks and entertainment venues. Notably, increase in hiring was also witnessed among manufacturers, healthcare providers and the government.
The report also stated that even though most companies are eager to hire, the modest job additions indicated a shortage of labor and supply, which in turn is holding back the economy from a dramatic recovery. Additionally, lingering fear of pandemic and the generous unemployment benefits is also keeping people from returning to work. In fact, many businesses have increased wages to attract new workers, pushing average hourly pay to rise 15 cents or 0.5%, to $30.33 an hour last month.
Other Economic Data
The U.S. Census Bureau reported on Jun 4, that U.S. factory orders slipped in April 0.6%, down following its eleven consecutive monthly increase. However, shipments increased $1.8 billion or 0.4% to $487.8 billion, maintaining its northward trend, though the rise was significantly lower compared with a 2.1% rise in March.
Weekly Roundup
For the week ending June 4, the Dow, the S&P 500 and the Nasdaq closed 0.7%, 0.6% and 0.5%, higher, respectively. The Dow and the S&P 500 registered modest gains for the second consecutive week, while the Nasdaq recorded its third winning week in a row. Given the volatility and lesser-than-expected job additions, investors remained hopeful that the Federal Reserve will maintain its accommodative monetary policy longer.
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Image: Bigstock
Stock Market News for Jun 7, 2021
Benchmarks closed in the green on Friday as lesser-than-expected job additions eased concerns that the Federal Reserve might tighten monetary policies soon.
The Dow Jones Industrial Average (DJI) rose 179.35 points, or 0.5%, to close at 34,756.39 and the S&P 500 gained 37.04 points, or 0.9%, to close at 4,229.89. The Nasdaq Composite Index closed at 13,814.49, adding 200 points, or 1.5%. The fear-gauge CBOE Volatility Index (VIX) decreased 9%, to close at 16.42. Advancing issues outnumbered declining ones for 2.03-to-1 ratio on the NYSE, while a 1.54-to-1 ratio on the Nasdaq favored advancers.
How Did the Benchmarks Perform?
Most of the Dow’s stocks closed in the green on Friday, with shares of salesforce.com, inc. (CRM - Free Report) leading the rally with a 2.9% gain, followed by significant gains in the technology stocks. Salesforce carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The tech-laden Nasdaq rallied 1.5% as investors focused on tech and growth funds more. Big tech companies like Microsoft Corporation (MSFT - Free Report) closed 2.1% higher, while Facebook, Inc. and Netflix, Inc. (NFLX - Free Report) closed at least 1% higher. Nasdaq’s highest gainer was DocuSign, Inc. (DOCU - Free Report) , gaining 19.8%, followed by Moderna, Inc. (MRNA - Free Report) , Biogen Inc. (BIIB - Free Report) and Tesla, Inc. (TSLA - Free Report) that added at least 4.6% on Friday.
Of the 11 major sectors of the S&P 500, only the utilities sector closed in the red declining 0.2%. the technology and communication services sectors were among the highest gainers rising 1.9% and 1.4%, respectively.
On Friday, the S&P 500 posted 57 new 52-week highs and no new lows, while the Nasdaq Composite recorded 112 new highs and 20 new lows. A total of 9.9 billion shares were traded on Jun 4, lower than the last 20-session average of 10.7 billion.
Unemployment Rate Shrinks in May
On Friday, the U.S. Bureau of Labor Statistics reported that the unemployment rate declined by 0.3 percentage point to 5.8% in May, higher than the consensus estimate of 5.9%. However, nonfarm payroll employment rose by 559,000 last month, falling short of the consensus estimate of 650,000 job additions. The number of new job additions in April was also revised to 278,000 from 266,000.
New jobs created in May were across businesses that suffered the biggest declines during the pandemic, employment is those areas are rising as restrictions are being lifted. Restaurants added 186,000 new jobs in May, as more restaurants were allowed to operate indoor & outdoor dining facilities and relaxed restrictions on wearing masks. There were significant job additions across hotels, museums, parks and entertainment venues. Notably, increase in hiring was also witnessed among manufacturers, healthcare providers and the government.
The report also stated that even though most companies are eager to hire, the modest job additions indicated a shortage of labor and supply, which in turn is holding back the economy from a dramatic recovery. Additionally, lingering fear of pandemic and the generous unemployment benefits is also keeping people from returning to work. In fact, many businesses have increased wages to attract new workers, pushing average hourly pay to rise 15 cents or 0.5%, to $30.33 an hour last month.
Other Economic Data
The U.S. Census Bureau reported on Jun 4, that U.S. factory orders slipped in April 0.6%, down following its eleven consecutive monthly increase. However, shipments increased $1.8 billion or 0.4% to $487.8 billion, maintaining its northward trend, though the rise was significantly lower compared with a 2.1% rise in March.
Weekly Roundup
For the week ending June 4, the Dow, the S&P 500 and the Nasdaq closed 0.7%, 0.6% and 0.5%, higher, respectively. The Dow and the S&P 500 registered modest gains for the second consecutive week, while the Nasdaq recorded its third winning week in a row. Given the volatility and lesser-than-expected job additions, investors remained hopeful that the Federal Reserve will maintain its accommodative monetary policy longer.
Breakout Biotech Stocks with Triple-Digit Profit Potential
The biotech sector is projected to surge beyond $775 billion by 2024 as scientists develop treatments for thousands of diseases. They’re also finding ways to edit the human genome to literally erase our vulnerability to these diseases.
Zacks has just released Century of Biology: 7 Biotech Stocks to Buy Right Now to help investors profit from 7 stocks poised for outperformance. Our recent biotech recommendations have produced gains of +50%, +83% and +164% in as little as 2 months. The stocks in this report could perform even better.
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