Led by a rally in banking stocks, the Dow Jones Industrial Average turned a near triple-digit loss at the open into a modest gain at the close after a volatile trading session was triggered by the bullish October payroll report that fueled expectations for a December rate hike.
In the latest monthly report, the Labor Department reported that the economy created 271,000 new non-farm jobs in October, well above estimates for +190,000, driving the jobless rate down to 5.0%, its lowest level since April 2008. Besides the impressive job increases, average hourly earnings were 0.4% higher in October, lifting the year-over-year gain in earnings to 2.5%, the strongest yearly gain in 6 years.
While banking stocks were surging on expectations for higher interest rates, shares in the utility sector plummeted as comparable bond yields were rising as much as 8 basis points. Although banking and technology stocks helped offset losses in utilities, the S&P 500 struggled to wipe out today’s losses and closed slightly in the red.
All three major benchmark indices, however, ended higher for a sixth consecutive week despite economic data and Fed-speak that pointed to the Fed tightening monetary policy at the December 15-16 FOMC meeting.
The Dow gained 1.3% this week with a 247 point gain while the S&P 500 squeezed out a 0.9% gain. The Nasdaq was the outperformer, however, with a 1.8% gain from last week.
Next week’s economic calendar starts off light with only import/export prices and wholesale trade, but picks up toward the end of the week with JOLTS, PPI, retail sales and the Univ of MI consumer sentiment survey.
Here’s where the markets stood at the close:
Dow Jones Industrial Index was up 46.90 points (+0.26%)
S&P 500 was down 0.73 points (-0.03%)
Nasdaq Composite Index was up 19.38 points (+0.38%)
FTSE 100 was down 0.17%
Nikkei 225 was up 0.78%
Hang Seng Index was down 0.80%
Shanghai China Composite Index was up 1.91%
(+) ZSPH (+40.64%) Offer from AstraZeneca ( AZN ) for $2.7 billion
(+) STMP (+38.10%) Q3 beats EPS, revenue estimates for Q3, raises FY15 guidance
(+) WTW (+35.50%) Raised its adjusted 2015 profit forecast
(+) HZNP (+21.67%) Reported better-than-expected Q3 results, raised 2015 guidance
(+) NVDA (+13.86%) Beat EPS estimates by $0.11 and topped revenue forecasts, Q4 sales guidance above analyst estimates
(+) YOKU (+7.26%) To be acquired by Alibaba ( BABA ) for $27.60 per ADS, $1 more than its previous offer
(-) ICON (-57.25%) Will restate previously filed results for Q1, Q2 2015, and FY13 and FY14, updated outlook for FY15
(-) MW (-43.44%) Lowered its earnings forecast for Q3 and FY ending January
(-) MRNS (-26.91%) Reported a public offering of common stock
(-) RDY (-18.01%) Received FDA warning on its manufacturing facilities in India
(-) GLUU (-12.02%) Q3 results top street estimates but guides Q4, FY15 below consensus estimates
(-) TRIP (-6.85%) Reported below-consensus Q3 results
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