Jobs report could make or break stock market
Stocks recovered just about all of Wednesday's losses. But the big drama comes Friday when the government issues its April jobs report. A bad report could hurt the market.
Stocks enjoyed nearly as big a rally on the day as the losses they suffered through on Wednesday. The Standard & Poor's 500 Index ($INX) set a new closing high. The Nasdaq Composite Index ($COMPX) finished at a 12-and-a-half-year high. And the Dow Jones Industrials ($INDU) regained all but eight points of Wednesday's 139-point loss.
The markets could be set up for more volatility on Friday -- because at 8:30 a.m. ET, the Labor Department issues its April unemployment and jobs report. The report is easily the most important report of any month, and there are fears that the report could disappoint.
The consensus is the report will show an employment rate of 7.6%, the same as March, with 150,000 new jobs created. Economic consultants IHS Global Insight expects 155,000. A disappointment like the March report, that showed just 88,000 new jobs, could send stocks tumbling right at the open. The Dow ended Thursday up 131 points to 14,832, just below its Tuesday finish and 34 points below its April 11 all-time high of 14,865.
The S&P 500 finished at 1,597.59, a gain of nearly 15 points. The close was two one-hundredths (.02) of a point higher than Tuesday's record close of 1,597.57. The Nasdaq jumped 41 points to 3,341, its best finish since ending at 3,415.79 on Nov. 7, 2000.
So the market is in the throes of a battle -- between bears who look at data showing slowing economies around the world, and bulls who believe the U.S. recovery is strong enough that it can weather global economic problems.
Here's why the market jumped:
Weekly U.S. jobless claims surprised by falling to early 2008 levels.
The Labor Department said 324,000 workers filed for unemployment benefits last week. That's the lowest rate since claims were at 318,000 for the week of Jan. 19, 2008. While the claims rate doubled over the next year, it's down 51% since hitting 667,000 in the week of March 28, 2009.
Oil prices took off after the European Central Bank cut its key interest rate.
Crude oil (-CL) in New York jumped $2.96 to $93.99 a barrel. Brent crude was up $2.84 to $102.79 in London. The ECB rate cut is a signal the Europeans may be serious about getting their economies moving again. And the ECB move followed the Federal Reserve's comment on Wednesday -- that it could actually expand its bond-buying program. Energy stocks were the strongest sector of the S&P 500. Gains for Chevron (CVX) and Exxon Mobil (XOM) contributed nearly 23 points to the Dow's gain. Let us not forget gold (-GC), up $21.40 to $1,467.60 an ounce.
Facebook's earnings cheered the Street.
Its shares were up $1.47 to $28.90 after reporting larger-than-expected advertising revenue from its mobile platform. The percentage gain was second-best among stocks in the Nasdaq-100 Index ($NDX). The index was up 41 points to 2,914. Facebook (FB)wasn't alone among tech stocks' showing nice gains. Apple (AAPL) rose $8.26 to $447.55. Google (GOOG) added $918 to $829.61. Intel (INTC) added 12 cents to $24.11 after naming Brian Krzanich to succeed retiring Paul Otellini as CEO.
General Motors said its North American business is pretty strong.
General Motors (GM) shares hit a 52-week high of $31.82. Overall earnings were lower than a year ago, mostly because of troubles in Europe. Its North American business was very profitable. Ford Motor (F) was up 3 cents to $13.41. It's adding 2,000 workers in Kansas City to build more F-150 pickups.
Disney hit a new all-time high.
Walt Disney (DIS) shares hit an intraday peak of $63.93 before closing at $63.88, up 67 cents. Disney is expected to report strong profits after Tuesday's close.
Interest rates dropped.
The 10-year Treasury yield fell to 1.631% from 1.639% on Wednesday. Thank the Fed and the ECB for that. Homebuilding shares rose nicely. Pultegroup (PHM) shares hit $21.93, up $1.03. The SPDR S&P Homebuilders (XHB) and the iShares Dow Jones Home Construction (ITB) exchange-traded funds also had strong gains.
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"And we are headed into another "Summer of Recovery"...?"
I don't think so. Hiring authorities are discriminating against all the primary categories. Who they want does not exist. The mortgage rate on a 15-year is 2.5% now but no one has a job with stability so homes are going to highest bidding companies. You don't improve your home when all your neighbors rent. There is an abundance of 2-3 job and job-less, not a lot of balanced living families. Pretty sure the stalemate is evident and rolling-in-money thinks it can outlast the rest. I don't think it will. You should be thinking more about my-- close the banks, end the Fed and get rid of Wall Street... because it makes more sense the further down we go.
POCarl....Stranger things have happened...
Capitalist or not...Energy in this Country is our LIFE BLOOD...
We should not be held hostage for it..imo.
And it would stabilise investments in that Sector, which we have several.
Now....if only we can hold onto it.
Next stop....1300 ???
Have a good one!
March revised from +88K to +138K
February revised from +268K to +332K
Time we stop riding the tidal wave and ride with god its all a joke
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