Wall Street closed sharply higher on Friday registering back-to-back weekly gains. Strong economic data, especially, impressive job additions in June, boosted market participants’ confidence. All the three major stock indexes ended in green. For the week as a whole, these three indexes finished in positive territory. U.S. stock markets were closed on Monday on account of Independence Day observation.
How Did The Benchmarks Perform?
The Dow Jones Industrial Average (DJI) was up 0.4% or 152.82 points to close at 34,786.35, marking a new record closing since May 7. The blue-chip index is currently 0.9% away from its all-time high posted on May 10. Notably, 22 components of the 30-stock index ended in the green while 8 in red.
The tech-heavy Nasdaq Composite finished at 14,639.33, rising 0.8% or 116.95 points, due to strong performance by large-cap technology stocks. The teach-laden index registered a new closing high after Jun 29. In intraday trading, the index recorded a fresh all-time high of 14,649.11.
Big techs like Alphabet Inc GOOGL, Amazon.com Inc. AMZN, Microsoft Corp. MSFT and Apple Inc. AAPL rallied 2.3%, 2.3%, 2.2% and 2%, respectively. Apple carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Meanwhile, the S&P 500 gained 0.8% to end at 4,352.34, marking seven consecutive days of winning streak, its longest since August 2020. The broad-market index also registered record closing highs in seven days in a row for the first time since June 1997. In intraday, the index posted a new all-time high of 4,355.43. The Technology Select Sector SPDR (XLK) surged 1.3%. Notably, nine out of eleven sectors of the benchmark index closed in the green while two in red.
The fear-gauge CBOE Volatility Index (VIX) was down 2.7% to 15.07. A total of 7.95 billion shares were traded on Friday, lower than the last 20-session average of 10.81 billion. Advancers outnumbered decliners on the NYSE by a 1.13-to-1 ratio. On Nasdaq, a 1.48-to-1 ratio favored declining issues.
Strong Job Additions in June
The Department of Labor reported that the U.S. economy added 850,000 jobs in June, marking its highest since August 2020, beating the consensus estimate of 684,000. May’s data was revise upward by 24,000 while April’s job additions were decreased by 9,000.
Major industries that added jobs were leisure & hospitalities (343,000), government (188,000), professional & business services (72,000), education & health (59,000), retail trade (67,100) and manufacturing (15,000).
Unemployment rate increased to 5.9% in June from 5.8% in May, exceeding the consensus estimate of 5.6%. This was primarily due to more Americans entered into the job market. The real unemployment rate – that accounts for discouraged workers and those holding part-time jobs for economic reasons – dropped 0.4% to pandemic-era low of 9.8%, first reading below 10% for the first time since March 2020.
Still 6.78 million less Americans are in the job market in June compared with the pre-pandemic level of February 2020. Unemployment rate in February 2020 was 3.5%. Meanwhile, the labor-force participation rate was 61.6% in June, remained same with the previous month. However, the reading was 1.7% lower than the pre-pandemic level.
Average hourly wage rate increased 0.3% in June. Year over year, average wage rate jumped 3.6% in June. Average work week declined 0.1 in June to 34.7 hours.
Other Economic Data
The Department of Commerce reported that factory orders in May climbed 1.7% surpassing the consensus estimate of 1.6%, marking its 12th monthly gain in last 13 months. April’s data was revised from a decline of 0.6% to a drop of 0.1%. Durable goods orders jumped 2.3% in May from a 0.7% decline in April. Nondurable goods orders rose 1% in May compared with 0.5% in the prior month. Core factory orders, excluding defense goods and civilian aircraft, rose 0.1% and shipment of core factory goods rose 1.1% in May.
The Department of Commerce reported that the U.S. international trade deficit surged 3.1% in May to $71.2 billion, the second highest on record after a trade deficit of $75 billion in March. In May, exports rose 0.6% to $206 billion while imports rose 1.3% to $277.3 billion.
Weekly Roundup
Last week was a solid one for Wall Street. The three major stock indexes – the Dow, the S&P 500 and the Nasdaq Composite – were up 1%, 1.7% and 1.9%, respectively. Strong economic data, specifically the job market together with robust consumer and business confidences strengthened investors’ sentiment on risky assets like equities.
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