Stocks Firing on All Cylinders After Better Than Expected Jobs Figures

Michael Teague |

With the Labor Department’s much anticipated jobs report giving markets just the positive economic data they needed, stocks extended the previous day’s late rally to close the week of trading on strong gains.

For the month of May, nonfarm payrolls were at 175,000, a nice bump up over expectations of 163,000. Private payrolls were also ahead of expectations of 175,000 at 178,000. Manufacturing payrolls were down 8,000, short of economist expectations of a gain of 4,000, while there was no movement in hourly earnings.

Meanwhile, the unemployment rate actually increased one tenth of a point to 7.6 percent.

The beat on payrolls was welcome, though not large enough to avoid being wiped out by subsequent downward revisions, but the 0.1 percent increase in unemployment was a catalyst for stocks. A slight increase in unemployment means that more people are actually looking for jobs to begin with, and this could signal the reversal of a trend that has seen many simply stop looking for work altogether.

More importantly, however, the bump in the unemployment rate also gave investors hope that the Federal Reserve will be forced to keep the stimulus money flowing.

The S&P 500 advanced 20.82 points on the day to close at 1,643.38, a gain of 1.28 percent, while the Dow jumped 1.38 percent to 15,248.12. The Nasdaq was up 1.32 percent, to close the week at 3,469.21 points.

The S&P 500 was propped up by strong performances from tech and financial stocks, with Morgan Stanley (MS) the leading gainer on the index, followed by Goldman Sachs (GS) and Citigroup (C). Xerox Corp. (XRX) led tech upwards, with Microsoft (MSFT), Yahoo! (YHOO) and Salesforce.com (CRM) in tow.

26 of the Dow’s 30 components were up on the day, and Google (GOOG) ended the week on an advance of 1.75 percent to $879.37 on the heels of Thursday’s shareholder meeting.

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of equities.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please go to: http://www.equities.com/disclaimer

Companies

Symbol Name Price Change % Volume
CRM Salesforce.com Inc 68.41 -0.05 -0.07 15,967,649
C Citigroup Inc. 56.02 -1.25 -2.18 25,110,311
MS Morgan Stanley 41.83 -0.33 -0.78 11,288,363
GS The Goldman Sachs Group Inc. 223.36 -3.27 -1.44 5,297,420
GOOG Alphabet Inc. 750.50 2.58 0.34 1,452,484
XRX Xerox Corporation 9.50 0.05 0.53 10,333,649
YHOO Yahoo! Inc. 40.07 0.44 1.11 8,588,544
CEA China Eastern Airlines Corporation Ltd. 23.80 0.04 0.17 10,711
MSFT Microsoft Corporation 59.25 0.05 0.08 25,515,665

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