Closing Market SummaryThe stock market finished the first week of May on an underwhelming note with the Nasdaq (-1.4%) leading to the downside while the S&P 500 fell 0.6%. The two indices lost a respective 1.5% and 0.2% for the week. Small caps fared worse than the major averages, as the Russell fell 1.7%, giving up 1.3% for the week.
The market followed Thursday's faceplant with an opening stumble that pressured the S&P 500 back to its low from Monday. The early selling was paced by influential sectors like technology and consumer discretionary, but the same two groups contributed to a rebound that briefly lifted the S&P 500 into positive territory in the late morning. Afternoon trade saw more selling, but the S&P 500 was able to stay above its morning low.
The April jobs report was released ahead of the opening bell, showing stronger than expected headline payroll growth, which masked a decrease in the labor force participation rate. That rate dipped to 62.2% from 62.4% and is now more than a point below its pre-pandemic level.
Nine sectors finished the day in negative territory with materials (-1.4%), consumer discretionary (-1.3%), communication services (-1.3%) finishing at the bottom of the leaderboard. The top-weighted technology sector (-0.8%) also ended among the laggards after a volatile session while energy (+2.9%) and utilities (+0.8%) outperformed throughout the day.
The consumer discretionary sector was one of the worst performers of the week amid growing concerns about consumer spending in the face of high inflation. The sector lost 3.4% this week, as top component Amazon (AMZN 2295.45, -32.69, -1.4%) sank to a two-year low while Tesla (TSLA 865.65, -7.63, -0.9%) fought to remain near its 200-day moving average (910.42).
In the technology sector, Apple (AAPL 157.28, +0.74, +0.5%) did yeomen's work, preventing the sector from finishing on an eleven-month low that was notched in morning trade. However, while the top tech component finished higher, it failed to reclaim its 200-day moving average (159.65), which has served as an area of congestion for the past two weeks.
On the upside, the defensively-oriented utilities sector benefited from volatility in the broader market, extending this week's gain to 1.2%, while energy also outperformed throughout the day, finishing on its high. The energy sector's strength was underpinned by continued strength in crude oil, which climbed $1.80, or 1.7%, to $110.00/bbl, gaining $4.97, or 4.7%, for the week. The energy sector, meanwhile, jumped 10.2% this week, extending its year-to-date advance to 49.2%.
Treasuries ended the day on a mixed note with longer tenors finishing lower while the 2-yr note climbed. The 10-yr yield rose six basis points to 3.12%, hitting a fresh high for the year while the 2-yr yield fell five basis points to 2.67%.
Today's economic data included the April jobs report and March Consumer Credit:
- April nonfarm payrolls increased by 428,000 (consensus 395,000). The 3-month average for total nonfarm payrolls decreased to 523,000 from 549,000. March nonfarm payrolls revised to 428,000 from 431,000. February nonfarm payrolls revised to 714,000 from 750,000.
- April private sector payrolls increased by 406,000 (Briefing.com consensus 390,000). March private sector payrolls revised to 424,000 from 426,000. February private sector payrolls revised to 704,000 from 739,000.
- April unemployment rate was 3.6% (consensus 3.6%), versus 3.6% in March. Persons unemployed for 27 weeks or more accounted for 25.2% of the unemployed versus 23.9% in March. The U6 unemployment rate, which accounts for unemployed and underemployed workers, was 7.0%, versus 6.9% in March.
- April average hourly earnings were up 0.3% (Briefing.com consensus 0.4%) versus an upwardly revised 0.5% increase (from 0.4%) in March. Over the last 12 months, average hourly earnings have risen 5.5%, versus 5.6% for the 12 months ending in March.
- The average workweek in April was 34.6 hours consensus 34.7), versus 34.6 hours in March. Manufacturing workweek fell by 0.2 hours to 40.5 hours. Factory overtime was unchanged at 3.4 hours.
- The labor force participation rate dipped to 62.2% from 62.4% in March.
- The employment-population ratio decreased to 60.0% from 60.1% in March.
- Consumer credit increased by $52.4 billion in March (consensus $25.0 billion) while the February increase was revised down to $37.7 bln from $41.8 bln.
Monday's economic data will be limited to the 10:00 ET release of the Wholesale Inventories report for March (prior 2.5%).
- Nasdaq Composite -22.4% YTD
- Russell 2000 -18.1% YTD
- S&P 500 -13.5% YTD
- Dow Jones Industrial Average -9.5% YTD