Closing Stock Market Summary
The stock market closed out the week on an upbeat note. The S&P 500 (+1.3%) was just a whisker shy of its 50-day moving average (5,129) and the Nasdaq Composite was 2.0% higher than yesterday. With today's gain, the Russell 2000 (+1.0%) is higher on the year by 0.4%.
The upside moves were in response to the April employment report at 8:30 a.m. ET. The report was weak enough to reduce concerns about a potential rate hike, but not weak enough to invite worries about the state of the labor market.
Nonfarm payrolls increased a smaller-than-expected 175,000 (consensus 250,000), average hourly earnings were up a smaller-than-expected 0.2% ( consensus 0.3%), the unemployment rate was up a higher-than-expected 3.9% (consensus 3.8%), and the average workweek was a smaller-than-expected 34.3 hours (consensus 34.4).
Treasury yields moved lower, contributing to the upside bias in the stock market.
The 10-yr note yield declined seven basis points today, and 17 basis points this week, to 4.50%. The 2-yr note yield declined seven basis points today, and 19 basis points this week to 4.81%.
Today's positive action was also supported by a big gain in shares of Apple (AAPL 183.38, +10.35, +6.0%) after reporting better-than-feared quarterly results and announcing a $110 billion share repurchase program. Amgen (AMGN 311.29, +32.90, +11.8%) was another influential winner today after pleasing earnings news and a positive trial update for its weight loss drug MariTide.
Meanwhile, Expedia (EXPE 115.33, -20.76, -15.3%), Fortinet (FTNT 58.88, -6.32, -9.7%), Ingersoll-Rand (IR 86.72, -6.13, -6.6%), and DaVita (DVA 134.45, -7.79, -5.5%) logged sizable declines after reporting earnings.
Only one of the S&P 500 sectors settled lower -- energy (-0.1%) -- while the information technology (+3.0%), communication services (+1.0%), and materials (+1.0%) sectors led the pack.
- S&P 500:+7.5% YTD
- Nasdaq Composite: +7.6% YTD
- S&P Midcap 400: +5.3% YTD
- Dow Jones Industrial Average: +2.6% YTD
- Russell 2000: +0.4% YTD
Reviewing today's economic data:
- April Nonfarm Payrolls 175K (Briefing.com consensus 250K); Prior was revised to 315K from 303K; April Nonfarm Private Payrolls 167K (consensus 175K); Prior was revised to 243K from 232K; April Avg. Hourly Earnings 0.2% (consensus 0.3%); Prior 0.3%; April Unemployment Rate 3.9% (consensus 3.8%); Prior 3.8%; April Average Workweek 34.3 (consensus 34.4); Prior 34.4
- The key takeaway is that this compilation is more than adequate to suggest the economy will remain in a growth mode, which is good for earnings, and plenty suitable to validate Fed Chair Powell's belief that the next policy move by the Fed won't be a rate hike.
- April S&P Global US Services PMI - Final 51.3; Prior 51.7
- April ISM Non-Manufacturing PMI 49.4% (consensus 51.8%); Prior 51.4%
- The key takeaway from the report is the worrying combination of a contraction in services sector activity and a pickup in prices paid. The economy is not in stagflation, but this particular report will be cited by some to advance that narrative.
Looking ahead, there is no US economic data of note on Monday.