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Stock Market News For Oct 7, 2019

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Markets closed in the green on Friday after the release of solid jobs report by the Bureau of Labor Statistics. Moreover, the unemployment rate fell to its lowest level in the past 50 years. This dampened fears related to an economic recession. The three major benchmarks ended in the green for the day. However, the Dow and the S&P 500 posted their third weekly decline.

The Dow Jones Industrial Average (DJI) increased 1.4%, to close at 26,573.72. The S&P 500 increased 1.4% to close at 2,952.01. The tech-laden Nasdaq Composite Index closed at 7,982.47, gaining 0.2%. The fear-gauge CBOE Volatility Index (VIX) decreased 5.9% to close at 17.99. Advancers outnumbered decliners on the NYSE by a 2.12-to-1 ratio. On Nasdaq, a 1.59-to-1 ratio favored advancing issues.

How Did The Benchmarks Perform?

The Dow added 372.7 points to close in the green. Gains for the Dow were rather broad based and supported by a rally in the shares of Apple (AAPL - Free Report) and JPMorgan (JPM - Free Report) , which gained 2.8% and 2.2%, respectively.

The S&P 500 gained 41.4 points to also end in the green. All of the 11 major sectors of the S&P 500 ended in positive territory, with financials leading the advancers. The Financial Select Sector SPDR Fund (XLF) increased 1.9% on Friday.

Meanwhile, the Nasdaq amassed 110.2 points to close in the positive territory. A broad-based rally in the tech sector boosted the Nasdaq. Shares of Netflix (NFLX - Free Report) gained 1.7% and also supported gains for the tech-heavy index. Netflix carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

‘Goldilocks’ Jobs Report Boosts Markets

Per the latest report from the Labor Department, the U.S. economy added 136,000 jobs in September, lower than the consensus estimate of 143,000 in the month. Also, the pace of growth in job additions fell to its lowest levels in the past four months.

Meanwhile, the unemployment rate fell to 3.5% in the month, its lowest reading since December 1969. This boosted the investor sentiment as such solid jobs report allayed fears of an impending recession.

However, it was lacklustre enough for the Federal Reserve to consider slashing benchmark interest rates further in its next meeting at the end of the month. Meanwhile, the CME FedWatch predicts a 76.4% probability of a rate cut.

Powell Remains Upbeat about the U.S. Economy

In a speech in Washington D.C., Fed Chief Jerome Powell stated that that America’s economy was in good shape. He, however, acknowledged the fact that the U.S. economy was facing pressures from “low growth, low inflation, and low interest rates.” He also said that the central bank was “examining strategies” to achieve the desired inflation level of 2%.

Weekly Roundup

For the week, the Dow and the S&P 500 declined 0.9% and 0.3%, respectively, to end lower for the third week on the trot. Meanwhile, the Nasdaq snapped it’s streak of two-week losses and eked out a weekly gain of 0.5%.

U.S. service sector growth slipped and investors became hopeful that signs of economic slowdown will evoke the Federal Reserve to lower interest rates for the third time this year. Meanwhile, markets also suffered due to slower-than-expected private job creation report, decline in factory output and an intensifying U.S.-EU trade war.

Further, the Institute for Supply Management (ISM) released disappointing manufacturing data that raised concerns about U.S. economy.

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