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Benchmarks settled in the green on Friday boosted by upbeat jobs data. The S&P 500 reached its 49th record high this year and the Dow registered the same for the 34th time this year. The S&P 500 and the Dow also registered their seventh successive week of gains. However, the Nasdaq ended in the red for the week.
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) rose 0.3% to close at 17,958.79. The Standard & Poor 500 (S&P 500) increased 0.2% to close at 2,075.37. The tech-laden Nasdaq Composite Index closed at 4,780.76; also gaining 0.2%. The fear-gauge CBOE Volatility Index (VIX) declined 4.5% to settle at 11.82. Total volume on the New York Stock Exchange was 3.4 billion. Advancers outpaced declining stocks on the NYSE. For 51% stocks that advanced, 46% declined.
The rise in total nonfarm payroll jobs had a positive impact on the benchmarks on Friday. The U.S. Bureau of Labor Statistics said total nonfarm payroll employment had risen by 321,000 in November. This is significantly more than the consensus estimate of 226,000. The economy added the most number of jobs in November since Jan 2012. The economy also added a minimum of 200,000 jobs for ten straight-months in November. This turned out to be the longest stretch in more than 30 years. Nonfarm payroll data for September and October were also revised higher, that showed 44,000 more jobs were added during the two-month period.
Additionally, the average hourly earnings of American workers increased 0.4% in November, more than the consensus estimate of a rise by 0.2%. Investors also focused on the other part of the data that showed unemployment rate remained at a six-year low of 5.8%.
Upbeat nonfarm payroll data strengthened the dollar and helped the U.S. 2-year Treasury yield touch the highest level since May 2011. Meanwhile, more number of traders believes that the Federal Reserve will increase key interest rates at its Sep 2015 policy meeting.
Financial companies gained the most among the S&P 500 components on expectations that higher interest rates will boost their earnings. The Financial Select Sector SPDR (XLF) rose 0.9%. Top holdings from the sector such as Wells Fargo & Company (WFC), JPMorgan Chase & Co. (JPM), The Goldman Sachs Group, Inc. (GS) Berkshire Hathaway Inc. (BRK-B), Bank of America Corporation (BAC) and Citigroup Inc. (C) increased 0.9%, 2.2%, 1.8%, 0.4%, 2.7% and 1.6%, respectively.
On the other hand, utility shares took a beating due to rise in Treasury yields. The Utilities Select Sector SPDR (XLU) was the biggest loser among the S&P 500 sectors. The sector declined 0.8%. Key utilities stocks from the sector such as Exelon Corporation (EXC), NextEra Energy, Inc. (NEE), Duke Energy Corporation (DUK), DTE Energy Company (DTE) and Southern Company (SO) decreased 0.3%, 0.5%, 1.9%, 0.8% and 0.8%, respectively. Overall, 6 out of 10 sectors of the S&P 500 ended in the green.
Coming to other economic reports, according to the U.S. Department of Commerce, new orders for manufactured goods decreased 0.7% in October. This was above the consensus estimate of a decrease by 0.1%. This reading follows a decline of 0.5% in September. Excluding transportation, new orders decreased 1.4% in October. Separately, unfilled orders and inventories data were up 0.4% and 0.1%, respectively. However, shipments were down 0.8%.
Separately, the Board of Governors of the Federal Reserve System reported that consumer credit increased by $13.2 billion in October, following September's $15.5 billion increase. Consumer credit increased at a seasonally adjusted annual rate of 5%. Non-revolving credit increased at an annual rate of 6.25%. Revolving credit rose at an annual rate of 1.25%.
Additionally, the U.S. Census Bureau and the U.S. Bureau of Economic Analysis, through the Department of Commerce, reported that goods and services deficit had decreased to $43.4 billion in October from $43.6 billion in September. Exports in October increased $2.3 billion to $197.5 billion, while imports increased $2.1 billion to $241 billion.
For the week, the S&P 500 and the Dow gained 0.4% and 0.7%, respectively, while the Nasdaq declined 0.2%.
Benchmarks mostly ended in the green fueled by a rally in energy and healthcare shares as well as solid gains in materials stocks. Moreover, merger and acquisition news involving Japan-based Otsuka Pharmaceuticals and Avanir Pharmaceuticals, and Cypress Semiconductor and Spansion Inc also boosted investor confidence. Additionally, encouraging reports of domestic vehicle sales, strong service sector numbers and uptick in construction spending had positive impact on the benchmarks.
Among the negatives, decline in sales during Thanksgiving weekend and the European Central Bank's failure to provide solid clues about further monetary stimulus had negative impact on investor sentiment. Moreover, domestic manufacturing activity expanded at a slower pace in November compared to that in October. This development, along with a decline in purchasing managers' index (PMI) in China dented investor sentiment.
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) rose 0.3% to close at 17,958.79. The Standard & Poor 500 (S&P 500) increased 0.2% to close at 2,075.37. The tech-laden Nasdaq Composite Index closed at 4,780.76; also gaining 0.2%. The fear-gauge CBOE Volatility Index (VIX) declined 4.5% to settle at 11.82. Total volume on the New York Stock Exchange was 3.4 billion. Advancers outpaced declining stocks on the NYSE. For 51% stocks that advanced, 46% declined.
The rise in total nonfarm payroll jobs had a positive impact on the benchmarks on Friday. The U.S. Bureau of Labor Statistics said total nonfarm payroll employment had risen by 321,000 in November. This is significantly more than the consensus estimate of 226,000. The economy added the most number of jobs in November since Jan 2012. The economy also added a minimum of 200,000 jobs for ten straight-months in November. This turned out to be the longest stretch in more than 30 years. Nonfarm payroll data for September and October were also revised higher, that showed 44,000 more jobs were added during the two-month period.
Additionally, the average hourly earnings of American workers increased 0.4% in November, more than the consensus estimate of a rise by 0.2%. Investors also focused on the other part of the data that showed unemployment rate remained at a six-year low of 5.8%.
Upbeat nonfarm payroll data strengthened the dollar and helped the U.S. 2-year Treasury yield touch the highest level since May 2011. Meanwhile, more number of traders believes that the Federal Reserve will increase key interest rates at its Sep 2015 policy meeting.
Financial companies gained the most among the S&P 500 components on expectations that higher interest rates will boost their earnings. The Financial Select Sector SPDR (XLF) rose 0.9%. Top holdings from the sector such as Wells Fargo & Company (WFC), JPMorgan Chase & Co. (JPM), The Goldman Sachs Group, Inc. (GS) Berkshire Hathaway Inc. (BRK-B), Bank of America Corporation (BAC) and Citigroup Inc. (C) increased 0.9%, 2.2%, 1.8%, 0.4%, 2.7% and 1.6%, respectively.
On the other hand, utility shares took a beating due to rise in Treasury yields. The Utilities Select Sector SPDR (XLU) was the biggest loser among the S&P 500 sectors. The sector declined 0.8%. Key utilities stocks from the sector such as Exelon Corporation (EXC), NextEra Energy, Inc. (NEE), Duke Energy Corporation (DUK), DTE Energy Company (DTE) and Southern Company (SO) decreased 0.3%, 0.5%, 1.9%, 0.8% and 0.8%, respectively. Overall, 6 out of 10 sectors of the S&P 500 ended in the green.
Coming to other economic reports, according to the U.S. Department of Commerce, new orders for manufactured goods decreased 0.7% in October. This was above the consensus estimate of a decrease by 0.1%. This reading follows a decline of 0.5% in September. Excluding transportation, new orders decreased 1.4% in October. Separately, unfilled orders and inventories data were up 0.4% and 0.1%, respectively. However, shipments were down 0.8%.
Separately, the Board of Governors of the Federal Reserve System reported that consumer credit increased by $13.2 billion in October, following September's $15.5 billion increase. Consumer credit increased at a seasonally adjusted annual rate of 5%. Non-revolving credit increased at an annual rate of 6.25%. Revolving credit rose at an annual rate of 1.25%.
Additionally, the U.S. Census Bureau and the U.S. Bureau of Economic Analysis, through the Department of Commerce, reported that goods and services deficit had decreased to $43.4 billion in October from $43.6 billion in September. Exports in October increased $2.3 billion to $197.5 billion, while imports increased $2.1 billion to $241 billion.
For the week, the S&P 500 and the Dow gained 0.4% and 0.7%, respectively, while the Nasdaq declined 0.2%.
Benchmarks mostly ended in the green fueled by a rally in energy and healthcare shares as well as solid gains in materials stocks. Moreover, merger and acquisition news involving Japan-based Otsuka Pharmaceuticals and Avanir Pharmaceuticals, and Cypress Semiconductor and Spansion Inc also boosted investor confidence. Additionally, encouraging reports of domestic vehicle sales, strong service sector numbers and uptick in construction spending had positive impact on the benchmarks.
Among the negatives, decline in sales during Thanksgiving weekend and the European Central Bank's failure to provide solid clues about further monetary stimulus had negative impact on investor sentiment. Moreover, domestic manufacturing activity expanded at a slower pace in November compared to that in October. This development, along with a decline in purchasing managers' index (PMI) in China dented investor sentiment.
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