May employment report boosts US stocks

US stocks ended with moderate gains for the week that ended on 07 June 2013. Indices gained between 0.4% to 1% for the week. All the weekly gains were incurred on the last trading day of the week, ie on Friday, 07 June 2013. U.S stocks spent the bulk of Friday's session near their highs after receiving a pre-market boost from the nonfarm payrolls report.

For the week, the Dow ended higher by 132.55 points (0.9%) at 15,248.12. Nasdaq ended higher by 13.31 points (0.4%) at 3,469.22. S&P 500 ended higher by 12.64 points (0.8%) at 1,643.38.

On Monday, the major averages registered modest gains. The Dow outperformed as Merck and Intel boosted the price-weighted index from the opening bell. Merck rose 3.8% after the company presented the interim results of one of its trials while Intel gained 4.0% following the weekend public debut of its fourth generation processors.

Tuesday's session ended in negative territory as the S&P 500 shed 0.6%. Equities opened the session on an upbeat note but that changed midway through the trading day when the major averages dipped into the red, where they remained until the close. The afternoon weakness left eight of the ten sectors in the red, but was most noticeable among cyclical groups as energy, financials, and industrials lost between 0.6% and 0.9%.

The S&P ended Wednesday's session with a loss of 1.4% after steady selling persisted throughout the day. All ten sectors ended in the red.

On Thursday, the S&P 500 settled higher by 0.9% despite having to endure early weakness brought on by volatility in the foreign exchange market. The Dollar Index faced heavy selling pressure into the early afternoon, and was down as much 1.8% before bouncing off. Although many currencies were boosted by the dollar selloff, none was greater than the strength of the Japanese yen, which at its best levels was up more than 3.0% against the greenback at 95.89. The significant movements in the foreign exchange market were followed by chatter suggesting a forced liquidation trade may have been the culprit behind the sharp downdraft in the dollar.

US stocks jumped on Friday, 07 June 2013 with the benchmark indexes posting their first weekly gain in three, as May payrolls rose more than forecast, but not so much as to cause worry about the Federal Reserve quickening any plans for monetary tightening.

The Dow Jones Industrial Average advanced 207.50 points, or 1.4%, on Friday to 15,248.12, with Boeing leading the pack, up 2.7%. The S&P 500 index added 20.82 points, or 1.3%, to 1,643.38, with consumer discretionary pacing gains that included nine of its 10 major industry sectors. The Nasdaq Composite climbed 45.16 points, or 1.3%, to 3,469.22.

Among economic report expected for the day, report from Labor Department Nonfarm payrolls increased by 175,000 jobs in May. That was up from a downwardly revised 149,000 (from 165,000) new jobs in April, and ahead of the consensus, which expected nonfarm payrolls to add 159,000 new jobs in May.

Even though payrolls beat expectations, the underlying trends point toward a stable, not upward moving, labor market and a slow-growth economy. Specifically, the increase in jobs was not enough to cause a sizable jump in income levels. That means retail sales growth will likely be soft for a second consecutive month.

The report detailed that Private payrolls added 178,000 jobs in May, up from 157,000 jobs in April, and above the 175,000 expected by the consensus.

The unemployment rate ticked up to 7.6% in May from 7.5% while the consensus expected the unemployment rate to remain at 7.5%. The increase, however, was the result of improving confidence in economic conditions. The labor force increased by 420,000, topping the 319,000 increase in the number of employed.

Looking at Friday's economic data, the average workweek remained at 34.5 in May after a slight upward revision in April (from 34.4). Average hourly earnings growth was flat.

According to the Federal Reserve, consumer credit increased by $11.1 billion in April. This follows the prior month's revised increase of $8.4 billion, and is lower than the $13.2 billion that had been broadly expected.

Precious metals ended lower at Comex on Friday, 07 June 2013. Gold futures tumbled Friday by more than $30 an ounce, for their first weekly loss in three, after jobs growth data came in slightly better than expected, driving Wall Street stocks higher and pulling investors away from the metal.

Gold for August delivery fell $32.80, or 2.3%, to settle at $1,383 an ounce on the Comex division of the New York Mercantile Exchange. The August contract, which was the most-active contract last Friday, lost 0.7% for the week after two straight weeks of gains. July silver dropped 96 cents, or 4.3%, to $21.74 an ounce. Tracking the most-active contract, prices were down 2.3% for the week.

Crude-oil futures closed higher at Nymex on Friday, 07 June 2013. prices closed above $96 a barrel on Friday for a weekly gain of more than 4%, with traders encouraged by U.S. job growth in May, but still uncertain over the outlook for the Federal Reserve's easing program.

Crude for July delivery climbed $1.27, or 1.3%, to settle at $96.03 a barrel on the New York Mercantile Exchange. It pared gains immediately after the jobs data, then fell below $94 and climbed back up again. Prices logged a gain of 4.4% for the week, buoyed in part by tensions in the Middle East and a bigger-than-expected drop in the past week's U.S. crude supplies.

For every share falling just over two gained on the New York Stock Exchange, where 721 million shares traded. Composite volume neared 3.3 billion.

Indian ADRs ended mixed on Friday. In the IT space, Infosys was up 0.8 and Wipro was up 0.9%. In the Banking space, HDFC Bank was up 0.4% and ICICI Bank was up 0.5%. In the Telecom space, Tata Communication was down 2.2%. In other space, Tata Motors was down 3.1%, Dr Reddys was up 1.9% and Sterlite was down 3.1%.

For the year, the Dow, Nasdaq and S&P 500 are trading higher by 16.4%, 14.9% and 15.2% respectively. There is no economic data of note scheduled for a Monday release.

Powered by Capital Market - Live News