After moving to the upside early in the session, stocks continue to turn in a strong performance in mid-day trading on Friday. The tech-heavy Nasdaq has shown a particularly strong advance after underperforming its counterparts in the previous session.
Currently, the Nasdaq is up 182.46 points or 1.3 percent at 13,796.97, more than offsetting yesterday’s 1 percent slump. The S&P 500 is also up 26.82 points or 0.6 percent at 4,219.67, while the narrower Dow is up 88.01 points or 0.3 percent at 34,665.05.
The strength on Wall Street comes following the release of the Labor Department’s closely watched report on employment in the month of May.
The report showed job growth in the U.S. reaccelerated in May, although the increase in employment still fell short of economist estimates.
Non-farm payroll employment jumped by 559,000 jobs in May after climbing by an upwardly revised 278,000 jobs in April.
Economists had expected employment to surge by 650,000 jobs compared to the addition of 266,000 jobs originally reported for the previous month.
Employment in the leisure and hospitality sector showed another significant increase, spiking by 292,000 jobs during the month. Notable job growth was also seen in public and private education and health care and social assistance.
The Labor Department also said the unemployment rate fell to 5.8 percent in May from 6.1 percent in April, while economists had expected the unemployment rate to dip to 5.9 percent.
With the bigger than expected decrease, the unemployment rate dropped to its lowest level since hitting 4.4 percent in March of 2020.
Traders seem to be viewing the weaker than expected job growth as a “Goldilocks” situation, where the economy is expanding but not fast enough to encourage the Federal Reserve to tighten monetary policy.
Paul Ashworth, Chief U.S. Economist at Capital Economics, noted employment remains 7.6 million below its pre-pandemic peak and said it would take more than 12 months at the current pace to fully eradicate the shortfall.
“In any other set of circumstances, monthly gains in excess of half a million would be amazing but, with a 7.6 million shortfall, it will be some time at that pace before the Fed’s ‘substantial further progress’ has been met,” Ashworth said.
The Fed has said it won’t begin tapering its asset purchases until “substantial further progress” has been made toward its goals of maximum employment and price stability.
Semiconductor stocks continue to turn in some of the market’s best performances on the day, resulting in a 2.2 percent jump by the Philadelphia Semiconductor Index.
Chipmaker Broadcom (AVGO) is posting a notable gain after reporting better than expected fiscal second quarter results and providing upbeat guidance.
Significant strength also remains visible among software stocks, with the Dow Jones U.S. Software Index surging up by 2.1 percent.
Gold stocks are also seeing considerable strength amid a rebound by the price of the precious metal. With gold for August delivery spiking $21.60 to $1,894.90 an ounce, the NYSE Arca Gold Bugs Index is up by 1.7 percent.
Networking and biotechnology stocks have also moved notably higher on the day, while oil service stocks are giving back ground following a recent rally.
In overseas trading, stock markets across the Asia-Pacific region turned in yet another mixed performance during trading on Friday. Japan’s Nikkei 225 Index slid by 0.4 percent, while China’s Shanghai Composite Index inched up by 0.2 percent.
Meanwhile, the major European markets all showed modest moves to the upside on the day. While the German DAX Index rose by 0.4 percent, the French CAC 40 Index and the U.K.’s FTSE 100 Index both crept up by 0.1 percent.
In the bond market, treasuries have move notably higher in reaction to the monthly jobs data. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 6.5 basis points at 1.560 percent.
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