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U.S. stock markets exhibited first single-day impressive rally of 2023 on Friday as the three major stock indexes closed sharply higher. A lower wage rate and a contraction in services sector PMI raised hope that inflation is cooling in desired direction. At the same time, market participants remained optimistic that a resilient labor market will enable the Fed for a soft landing of the economy. For the week as a whole, these stock indexes ended in green too.
How Did The Benchmarks Perform?
The Dow Jones Industrial Average (DJI) surged 2.1% or 700.53 points to close at 33,630.61. Notably, all components of the 30-stock index ended in positive territory. The tech-heavy Nasdaq Composite finished at 10,569.29, jumping 2.6% or 264.05 points due to strong performance of large-cap technology stocks.
The S&P 500 climbed 2.3% to end at 3,895.08. All 11 broad sectors of the benchmark index closed in positive territory. The Consumer Staples Select Sector SPDR (XLP), the Real Estate Select Sector SPDR (XLRE), the Materials Select Sector SPDR (XLB), the Technology Select Sector SPDR (XLK) and the Industrials Select Sector SPDR (XLI) appreciated 2.7%, 2.9%, 3.4%, 2.9% and 2.7%, respectively.
The major gainer of the broad-market index was First Solar Inc. (FSLR - Free Report) , shares of which advanced 7.8%. First Solar currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The fear-gauge CBOE Volatility Index (VIX) was down 5.9% to 21.13. A total of 11.15 billion shares were traded on Friday, higher than the last 20-session average of 10.84 billion. Advancers outnumbered decliners on the NYSE by a 6.69-to-1 ratio. On Nasdaq, a 2.59-to-1 ratio favored advancing issues.
December Job Data Looks Impressive
The Department of Labor reported that the nonfarm payroll increased 223,000 in December beating the consensus estimate of 208,000. However, December’s job additions fell below November’s data that was revised downward to 256,000 from 263,000 reported earlier.
Major sectors that recruited maximum people were Education & Health (78,000), Leisure & Hospitality (67,000), Construction (28,000) and Wholesale (12,100). Average workweek came in at 34.3 in December, dropped marginally from 34.4 in last month.
The unemployment rate came in at 3.5% in December below the consensus estimate of 3.7%. November’s data was revised downward to 3.6% from 3.7% reported earlier. The metric for December was the lowest since 1969.
The real unemployment rate that includes discouraged workers and those holding part-time jobs for economic reasons fell to 6.5% in December, marking the lowest-level since 1994. The labor force participation rate ticked up to 62.3% in December. However, the metric stayed 1% below the pre-pandemic level of February 2020.
Hourly wage rate increased 0.3% in December below the consensus estimate of 0.4%. November’s data was revised downward to 0.4% from 0.6% reported earlier. Year over year, hourly wage rate increased 4.6% in December compared with the consensus estimate of 5%. Wage rate increased 4.8% year over year in November.
Other Economic Data
The Institute of Supply Management reported that services sector index for December plummeted to 49.6% in December from 56.5% in November. The consensus estimate was 55.1%. Any reading below 50% indicates contraction in services activities. The index contracted for the first time since May 2020, at the onset of the coronavirus pandemic.
Factory orders (including durable and non-durable goods) dropped 1.8% in December compared with the consensus estimate of a decline of 0.8%. November’s data was revised downward to an increase of 0.4% from 1% reported earlier.
Weekly Roundup
Last week was an impressive one for Wall Street. The Dow, the S&P 500 and the Nasdaq Composite gained 1.5%, 1.4% and 1%, respectively. The S&P 500 and the Nasdaq Composite terminated a four-week losing streak. Expectation that the peak inflation is behind us lifted investors’ confidence in risky assets like equities.
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Stock Market News for Jan 9, 2023
U.S. stock markets exhibited first single-day impressive rally of 2023 on Friday as the three major stock indexes closed sharply higher. A lower wage rate and a contraction in services sector PMI raised hope that inflation is cooling in desired direction. At the same time, market participants remained optimistic that a resilient labor market will enable the Fed for a soft landing of the economy. For the week as a whole, these stock indexes ended in green too.
How Did The Benchmarks Perform?
The Dow Jones Industrial Average (DJI) surged 2.1% or 700.53 points to close at 33,630.61. Notably, all components of the 30-stock index ended in positive territory. The tech-heavy Nasdaq Composite finished at 10,569.29, jumping 2.6% or 264.05 points due to strong performance of large-cap technology stocks.
The S&P 500 climbed 2.3% to end at 3,895.08. All 11 broad sectors of the benchmark index closed in positive territory. The Consumer Staples Select Sector SPDR (XLP), the Real Estate Select Sector SPDR (XLRE), the Materials Select Sector SPDR (XLB), the Technology Select Sector SPDR (XLK) and the Industrials Select Sector SPDR (XLI) appreciated 2.7%, 2.9%, 3.4%, 2.9% and 2.7%, respectively.
The major gainer of the broad-market index was First Solar Inc. (FSLR - Free Report) , shares of which advanced 7.8%. First Solar currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The fear-gauge CBOE Volatility Index (VIX) was down 5.9% to 21.13. A total of 11.15 billion shares were traded on Friday, higher than the last 20-session average of 10.84 billion. Advancers outnumbered decliners on the NYSE by a 6.69-to-1 ratio. On Nasdaq, a 2.59-to-1 ratio favored advancing issues.
December Job Data Looks Impressive
The Department of Labor reported that the nonfarm payroll increased 223,000 in December beating the consensus estimate of 208,000. However, December’s job additions fell below November’s data that was revised downward to 256,000 from 263,000 reported earlier.
Major sectors that recruited maximum people were Education & Health (78,000), Leisure & Hospitality (67,000), Construction (28,000) and Wholesale (12,100). Average workweek came in at 34.3 in December, dropped marginally from 34.4 in last month.
The unemployment rate came in at 3.5% in December below the consensus estimate of 3.7%. November’s data was revised downward to 3.6% from 3.7% reported earlier. The metric for December was the lowest since 1969.
The real unemployment rate that includes discouraged workers and those holding part-time jobs for economic reasons fell to 6.5% in December, marking the lowest-level since 1994. The labor force participation rate ticked up to 62.3% in December. However, the metric stayed 1% below the pre-pandemic level of February 2020.
Hourly wage rate increased 0.3% in December below the consensus estimate of 0.4%. November’s data was revised downward to 0.4% from 0.6% reported earlier. Year over year, hourly wage rate increased 4.6% in December compared with the consensus estimate of 5%. Wage rate increased 4.8% year over year in November.
Other Economic Data
The Institute of Supply Management reported that services sector index for December plummeted to 49.6% in December from 56.5% in November. The consensus estimate was 55.1%. Any reading below 50% indicates contraction in services activities. The index contracted for the first time since May 2020, at the onset of the coronavirus pandemic.
Factory orders (including durable and non-durable goods) dropped 1.8% in December compared with the consensus estimate of a decline of 0.8%. November’s data was revised downward to an increase of 0.4% from 1% reported earlier.
Weekly Roundup
Last week was an impressive one for Wall Street. The Dow, the S&P 500 and the Nasdaq Composite gained 1.5%, 1.4% and 1%, respectively. The S&P 500 and the Nasdaq Composite terminated a four-week losing streak. Expectation that the peak inflation is behind us lifted investors’ confidence in risky assets like equities.