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Wall Street closed higher after a choppy session on Friday to finish the first week of 2024. Market participants digested better-than-expected job reports of December. However, weak services PMI boosted investors’ confidence that the first cut in interest rate will happen in March. All three major stock indexes ended in positive territory. However, U.S. stock markets suffered a blow last week with three major stock indexes finished in negative zone.
How Did The Benchmarks Perform?
The Dow Jones Industrial Average (DJI) was up 0.1% to close at 37,466.11. At intraday high, the blue-chip index was up more than 187 points and at intraday low, the index was down nearly 117 points. Notably, 17 components of the 30-stock index ended in positive territory, while 13 ended in negative zone.
The tech-heavy Nasdaq Composite finished at 14,524.07, gaining 0.1% due to good performance of large-cap technology stocks. The tech-laden index terminated a five-day losing streak for the first time since Oct 12, 2022.
The S&P 500 rose 0.2% to finish at 4,697.24. The market’s benchmark index terminated a four-day losing streak for the first time over two months. Seven out of 11 broad sectors of the broad-market index ended in positive territory while four in negative zone.
The Communication Services Select Sector SPDR (XLC), the Financials Select Sector SPDR (XLF) and the Utilities Select SPDR (XLU) advanced 0.4% each, while the Consumer Staples Select Sector SPDR (XLP) and the Real Estate Select Sector SPDR (XLRE) dropped 0.2% each.
The fear-gauge CBOE Volatility Index (VIX) was down 5.5% to 13.35. A total of 11.2 billion shares were traded on Friday, lower than the last 20-session average of 12.3 billion.
Better-Than-Expected Jobs Data
The Department of Labor reported that the U.S. economy added 216,000 jobs in December, beating the consensus estimate of 170,000. However, the metric for November was revised downward to 173,000 from 199,000. Similarly, the data for October was also revised downward to 105,000 from 150,000. For 2023, average job additions per month was 225,000 compared with 399,000 in 2022.
Major recruiters of December were government (52,000), health care (38,000), leisure and hospitality (40,000), social assistance (21,000), construction (17,000) and retail (17,000). The major job loser was Transportation (23,000).
The unemployment rate in December was 3.7%, remains flat month-over-month but below the consensus estimate of 3.8%. However, the real unemployment rate (including discouraged workers and those holding part-time jobs for economic reasons) increased to 7.1% in December form 7% in the previous month.
Month over month, the labor force participation rate was down 0.3% or 676,000 in December to 62.5%. Average workweek dropped marginally to 34.3 in December from 34.4 in November. Average hourly wage rate increased 0.4% in December, remains flat with November but higher than the consensus estimates of 0.3%. Year over year, wage rate increased 4.1% in December, beating the consensus estimate of 3.9%.
Other Economic Data
The Institute of Supply Management reported that the services Index for December came in at 50.6, reflecting 12th consecutive months of expansion. Any reading above 50 indicates expansion in services activities. However, the metric was lower that November’s data of 52.7 and the consensus estimate of 52.5. The sub index for new orders was 52.8 in December compared with 55.5 in November. The sub index for employment contracted to 43.3 in December from 50.7 in November. December’s data was the lowest since May 2020.
Factory orders in November increased 2.6%, outpacing the consensus estimate of 2.5%. October’s data was revised upward to a decline of 3.4% from a decline of 3.6% reported earlier. New orders for durable goods increased 5.4% in November compared with 5.1% in October. New orders for non-durable goods remained flat in December with the prior month.
Weekly Roundup
Last week was disappointing for Wall Street as all three major stock indexes ended in negative territory terminating a nine-week long winning streak. The Dow, the S&P 500 and the Nasdaq Composite – fell 0.6%, 1.5% and 3.3%, respectively. Market participants remained concerned regarding the timing of the first rate cut along with stretched valuations of U.S. stock markets.
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Stock Market News for Jan 8, 2024
Wall Street closed higher after a choppy session on Friday to finish the first week of 2024. Market participants digested better-than-expected job reports of December. However, weak services PMI boosted investors’ confidence that the first cut in interest rate will happen in March. All three major stock indexes ended in positive territory. However, U.S. stock markets suffered a blow last week with three major stock indexes finished in negative zone.
How Did The Benchmarks Perform?
The Dow Jones Industrial Average (DJI) was up 0.1% to close at 37,466.11. At intraday high, the blue-chip index was up more than 187 points and at intraday low, the index was down nearly 117 points. Notably, 17 components of the 30-stock index ended in positive territory, while 13 ended in negative zone.
The tech-heavy Nasdaq Composite finished at 14,524.07, gaining 0.1% due to good performance of large-cap technology stocks. The tech-laden index terminated a five-day losing streak for the first time since Oct 12, 2022.
The S&P 500 rose 0.2% to finish at 4,697.24. The market’s benchmark index terminated a four-day losing streak for the first time over two months. Seven out of 11 broad sectors of the broad-market index ended in positive territory while four in negative zone.
The Communication Services Select Sector SPDR (XLC), the Financials Select Sector SPDR (XLF) and the Utilities Select SPDR (XLU) advanced 0.4% each, while the Consumer Staples Select Sector SPDR (XLP) and the Real Estate Select Sector SPDR (XLRE) dropped 0.2% each.
The major gainer of the S&P 500 Index was Catalent Inc. (CTLT - Free Report) after its shares surged 5.3%. Catalent currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The fear-gauge CBOE Volatility Index (VIX) was down 5.5% to 13.35. A total of 11.2 billion shares were traded on Friday, lower than the last 20-session average of 12.3 billion.
Better-Than-Expected Jobs Data
The Department of Labor reported that the U.S. economy added 216,000 jobs in December, beating the consensus estimate of 170,000. However, the metric for November was revised downward to 173,000 from 199,000. Similarly, the data for October was also revised downward to 105,000 from 150,000. For 2023, average job additions per month was 225,000 compared with 399,000 in 2022.
Major recruiters of December were government (52,000), health care (38,000), leisure and hospitality (40,000), social assistance (21,000), construction (17,000) and retail (17,000). The major job loser was Transportation (23,000).
The unemployment rate in December was 3.7%, remains flat month-over-month but below the consensus estimate of 3.8%. However, the real unemployment rate (including discouraged workers and those holding part-time jobs for economic reasons) increased to 7.1% in December form 7% in the previous month.
Month over month, the labor force participation rate was down 0.3% or 676,000 in December to 62.5%. Average workweek dropped marginally to 34.3 in December from 34.4 in November. Average hourly wage rate increased 0.4% in December, remains flat with November but higher than the consensus estimates of 0.3%. Year over year, wage rate increased 4.1% in December, beating the consensus estimate of 3.9%.
Other Economic Data
The Institute of Supply Management reported that the services Index for December came in at 50.6, reflecting 12th consecutive months of expansion. Any reading above 50 indicates expansion in services activities. However, the metric was lower that November’s data of 52.7 and the consensus estimate of 52.5. The sub index for new orders was 52.8 in December compared with 55.5 in November. The sub index for employment contracted to 43.3 in December from 50.7 in November. December’s data was the lowest since May 2020.
Factory orders in November increased 2.6%, outpacing the consensus estimate of 2.5%. October’s data was revised upward to a decline of 3.4% from a decline of 3.6% reported earlier. New orders for durable goods increased 5.4% in November compared with 5.1% in October. New orders for non-durable goods remained flat in December with the prior month.
Weekly Roundup
Last week was disappointing for Wall Street as all three major stock indexes ended in negative territory terminating a nine-week long winning streak. The Dow, the S&P 500 and the Nasdaq Composite – fell 0.6%, 1.5% and 3.3%, respectively. Market participants remained concerned regarding the timing of the first rate cut along with stretched valuations of U.S. stock markets.