Stocks Close Modestly Higher On Upbeat Jobs Data

Following the release of better than expected employment data, stocks saw modest strength during trading on Friday. While buying interest was somewhat subdued, the Dow still reached another new record closing high.

The major averages ended the day modestly higher. The Dow rose 66.71 points or 0.3 percent to 22,092.81, the Nasdaq edged up 11.22 points or 0.2 percent to 6,351.56 and the S&P 500 crept up 4.67 points or 0.2 percent to 2,476.83.

For the week, the major averages turned in a mixed performance. The Nasdaq fell by 0.4 percent, while the S&P 500 rose by 0.2 percent and the Dow jumped by 1.2 percent.

The modest strength on Wall Street came after a closely watched Labor Department report showed employment in the U.S. jumped by much more than anticipated in the month of July.

The Labor Department said non-farm payroll employment surged up by 209,000 jobs in July after spiking by an upwardly revised 231,000 jobs in June.

Economists had expected employment to climb by 183,000 jobs compared to the addition of 222,000 jobs originally reported for the previous month.

With the stronger than expected job growth, the unemployment rate edged down to 4.3 percent in July from 4.4 percent in June. The modest decrease matched economist estimates.

The report also said average hourly employee earnings were up by 2.5 percent year-over-year in July, unchanged from the previous month.

The data generated optimism about the economic outlook, although it also raised concerns about the possibility of future interest rate hikes.

“Following the disappointing ISM surveys for July, released earlier this week, this employment report provides reassurance that the real economy remained solid at the start of the third quarter,” said Michael Pearce, U.S. economist at Capital Economics.

He added, “If the labor market continues to tighten over the coming months, as the survey evidence suggests it will, the Fed will press ahead with rate hikes and balance sheet normalization later this year.”

A separate report from the Commerce Department showed the trade deficit narrowed more than expected in June amid rising exports and falling imports.

The report said the trade deficit narrowed to $43.6 billion in June from $46.4 billion in May. Economists had expected the deficit to narrow to $45.0 billion.

Sector News

After falling sharply over the past few sessions, natural gas stocks showed a strong move back to the upside on the day. The NYSE Arca Natural Gas Index jumped by 1.8 percent after ending…

Read the full article from the Source…

Leave a Reply

Your email address will not be published. Required fields are marked *