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Benchmarks finished higher on Friday, boosted by the release of stronger than expected jobs report for June and recovery of technology shares. The strong U.S. labor market helped to improve investor confidence which ultimately had a positive impact on the broader markets. Additionally, the technology sector staged a recovery boosted by gain in shares of tech stalwarts such as Apple, Facebook and Microsoft. Moreover, the Dow, the S&P 500 and the Nasdaq ended the week in a positive territory.
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) advanced 0.4% to close at 21,414.34. The S&P 500 rose 0.6% to finish at 2,425.18, posting its biggest gain in last six sessions. The tech-heavy Nasdaq Composite Index gained 1% to finish at 6,153.08. A total of around 5.74 billion shares were traded on Friday, much lower than the last 20-session average of 7.13 billion shares. Advancers outnumbered declining stocks on the NYSE by a 2.19 to 1 ratio.
Strong Nonfarm Payroll Data
According to the U.S. Bureau of Labor Statistics the U.S. economy added 222,000 jobs in June, much higher than the consensus estimate of 174,000. The addition of 222,000 jobs marked the second-biggest job gains of the year. Strong jobs data were primarily attributable to gains in health care, financial activities, social assistance, professional and business services and mining.
Health care sector led the way by adding 37,000 jobs, whereas professional and business services experienced an increase of 35,000 jobs. Social assistance experienced an increase of 23,000 jobs, whereas food services and drinking places added another 29,000 jobs. There was an addition of 17,000 jobs by the financial sector, whereas mining added another 8,000 jobs, with most of the gain coming from support activities for mining. However, employment in other major industries such as construction, manufacturing, wholesale trade, retail trade, transportation and warehousing, information, and government experienced little change.
Meanwhile, unemployment rate increased marginally from 4.3% to 4.4% in June, as more people came into the labor force searching for jobs. The number of unemployed persons changed little and was recorded at 7 million. Since January, the unemployment rate has experienced a decrease of 0.4%. The "U-6" is considered to be a broader measure of the unemployment as it includes those workers who are working part-time for purely economic reasons. U6 unemployment increased to 8.6%.
Payrolls data also showed that average hourly wages increased 0.2% to $26.25 against the consensus estimate of a rise of 0.3%. Hourly pay has experienced an increase of 2.5% over the last twelve months. Additionally, the labor force participation rate for June increased marginally to come in at 62.8%. Moreover, job additions April was revised up by 33,000 to 207,000, whereas May saw an upward revision of 14,000 to 152,000.
The stronger than expected jobs report lifted expectations for another rate hike in this year. As per the CME FedWatch tool, the probability of a rate hike at the Fed's December meeting held at 50.6%.
Technology Shares Recover
Technology shares rebounded on Friday, lifting the broader markets higher. Investors regained their faith in tech shares after the tech sector suffered a decline of 0.9% in the previous session. Earlier tech shares had suffered several setbacks in the backdrop of concerns about valuations of technology companies.
For the week, the Dow, S&P 500, the Nasdaq registered a gain of 0.3% and 0.1% and 0.2% respectively. Minutes of June 13-14 Federal Open Market Committee meeting released on Wednesday revealed that several Fed officials were in favor of unwinding its massive $4.5 trillion balance sheet within a “couple of months”.
Separately, oil prices posted its biggest drop in a month on Wednesday, ending its longest stretch of gains since 2010. Moreover, The Institute for Supply Management (ISM) manufacturing index for June was recorded at 57.8, posting its highest level since 2014. Meanwhile, investors remained concerned following North Korea’s declaration of the successful launch of an intercontinental ballistic missile.
US energy explorer Apache Corporation (APA - Free Report) is set to exit Canada following its latest deal with local oil producer Paramount Resources Ltd. (Read More)
L Brands, Inc. continues to disappoint investors with dismal comparable sales for the seventh straight month as the company posted June sales. (Read More)
Will You Make a Fortune on the Shift to Electric Cars?
Here's another stock idea to consider. Much like petroleum 150 years ago, lithium power may soon shake the world, creating millionaires and reshaping geo-politics. Soon electric vehicles (EVs) may be cheaper than gas guzzlers. Some are already reaching 265 miles on a single charge.
With battery prices plummeting and charging stations set to multiply, one company stands out as the #1 stock to buy according to Zacks research. It's not the one you think. See This Ticker Free >>
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Stock Market News for July 10, 2017
Benchmarks finished higher on Friday, boosted by the release of stronger than expected jobs report for June and recovery of technology shares. The strong U.S. labor market helped to improve investor confidence which ultimately had a positive impact on the broader markets. Additionally, the technology sector staged a recovery boosted by gain in shares of tech stalwarts such as Apple, Facebook and Microsoft. Moreover, the Dow, the S&P 500 and the Nasdaq ended the week in a positive territory.
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) advanced 0.4% to close at 21,414.34. The S&P 500 rose 0.6% to finish at 2,425.18, posting its biggest gain in last six sessions. The tech-heavy Nasdaq Composite Index gained 1% to finish at 6,153.08. A total of around 5.74 billion shares were traded on Friday, much lower than the last 20-session average of 7.13 billion shares. Advancers outnumbered declining stocks on the NYSE by a 2.19 to 1 ratio.
Strong Nonfarm Payroll Data
According to the U.S. Bureau of Labor Statistics the U.S. economy added 222,000 jobs in June, much higher than the consensus estimate of 174,000. The addition of 222,000 jobs marked the second-biggest job gains of the year. Strong jobs data were primarily attributable to gains in health care, financial activities, social assistance, professional and business services and mining.
Health care sector led the way by adding 37,000 jobs, whereas professional and business services experienced an increase of 35,000 jobs. Social assistance experienced an increase of 23,000 jobs, whereas food services and drinking places added another 29,000 jobs. There was an addition of 17,000 jobs by the financial sector, whereas mining added another 8,000 jobs, with most of the gain coming from support activities for mining. However, employment in other major industries such as construction, manufacturing, wholesale trade, retail trade, transportation and warehousing, information, and government experienced little change.
Meanwhile, unemployment rate increased marginally from 4.3% to 4.4% in June, as more people came into the labor force searching for jobs. The number of unemployed persons changed little and was recorded at 7 million. Since January, the unemployment rate has experienced a decrease of 0.4%. The "U-6" is considered to be a broader measure of the unemployment as it includes those workers who are working part-time for purely economic reasons. U6 unemployment increased to 8.6%.
Payrolls data also showed that average hourly wages increased 0.2% to $26.25 against the consensus estimate of a rise of 0.3%. Hourly pay has experienced an increase of 2.5% over the last twelve months. Additionally, the labor force participation rate for June increased marginally to come in at 62.8%. Moreover, job additions April was revised up by 33,000 to 207,000, whereas May saw an upward revision of 14,000 to 152,000.
The stronger than expected jobs report lifted expectations for another rate hike in this year. As per the CME FedWatch tool, the probability of a rate hike at the Fed's December meeting held at 50.6%.
Technology Shares Recover
Technology shares rebounded on Friday, lifting the broader markets higher. Investors regained their faith in tech shares after the tech sector suffered a decline of 0.9% in the previous session. Earlier tech shares had suffered several setbacks in the backdrop of concerns about valuations of technology companies.
Shares of Facebook , Apple (AAPL - Free Report) and Microsoft (MSFT - Free Report) gained 1.8%, 1% and 1.3% respectively and were the biggest booster to the S&P500 and the Nasdaq. The broader Technology Select Sector SPDR (XLK) advanced 1.2%, emerging as the best performing sector of the S&P 500. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Weekly Report
For the week, the Dow, S&P 500, the Nasdaq registered a gain of 0.3% and 0.1% and 0.2% respectively. Minutes of June 13-14 Federal Open Market Committee meeting released on Wednesday revealed that several Fed officials were in favor of unwinding its massive $4.5 trillion balance sheet within a “couple of months”.
Separately, oil prices posted its biggest drop in a month on Wednesday, ending its longest stretch of gains since 2010. Moreover, The Institute for Supply Management (ISM) manufacturing index for June was recorded at 57.8, posting its highest level since 2014. Meanwhile, investors remained concerned following North Korea’s declaration of the successful launch of an intercontinental ballistic missile.
Stocks that made Headlines
Apache to Exit Canada, Eyes Prospects in Other Regions
US energy explorer Apache Corporation (APA - Free Report) is set to exit Canada following its latest deal with local oil producer Paramount Resources Ltd. (Read More)
L Brands' June Comps Fall, Dismal Run Persists, Stock Down
L Brands, Inc. continues to disappoint investors with dismal comparable sales for the seventh straight month as the company posted June sales. (Read More)
Will You Make a Fortune on the Shift to Electric Cars?
Here's another stock idea to consider. Much like petroleum 150 years ago, lithium power may soon shake the world, creating millionaires and reshaping geo-politics. Soon electric vehicles (EVs) may be cheaper than gas guzzlers. Some are already reaching 265 miles on a single charge.
With battery prices plummeting and charging stations set to multiply, one company stands out as the #1 stock to buy according to Zacks research. It's not the one you think. See This Ticker Free >>