Before The Bell
The brief downturn in the stock market, which took the major averages into the minus column for the month of January, has ended, brought to an end by a surge of optimism on faster vaccine distributions, better economic metrics, and solid corporate profits. Specifically, with regard to the economy, a survey issued moments ago by the Labor Department showed decent, but not especially encouraging, figures on non-farm payrolls for the month of January. That report followed improving data on weekly jobless filings issued yesterday.
Specifically, the government reported that the nation had added 49,000 jobs last month. Expectations had been for the creation of 58,000 new positions. The jobless rate came in at 6.3%. Forecasts had been for a 6.7% rate. In other aspects of the report, the most vital one of the month, the labor force participation rate was 61.4%, off a tad from the month before, and average hourly wages rose by just 0.2%. Worse, payroll figures were revised lower for both November and December. In all, it was a so-so report. The equity futures held steady in the plus column after the issuance, suggesting a moderately higher opening when trading resumes shortly.
Regarding the market, as has been the practice for much of this past week, the Street fashioned a wire-to-wire win yesterday, with triple-digit gains in both the Dow Jones Industrial Average and the tech-heavy NASDAQ. Stocks rose on a solid batch of corporate earnings reports and favorable economic data. The market initially was underpinned by the better-than-expected jobless claims reading, in which first-time filings eased to 779,000. That was below the 830,000 estimate for the latest week.
As for some individual winners, iconic iPhone maker Apple (AAPL) saw its shares rise, as it indicated its intent in getting into the driverless car market. Shares of IBM (IBM) also gained in the tech space. On the other hand, shares of Merck (MRK) backed off after its CEO announced his retirement. Overall, it was a stellar session, with the key indexes rising steadily and strongly throughout the day. Now, the Street will attempt to run the table for the week. It could well be able to do that.
Looking out to a new day, and following the employment report, Wall Street will seek to add to the gains tabulated during the past four sessions. As for yesterday, the marker continued to soar into the close, and when all of the numbers were in, the Dow had added 332 points and the NASDAQ had climbed 167 points. The surge in the blue chips, meantime, lifted that index back above 31,000. The NASDAQ, for its part, is approaching 14,000. Leading the way higher were the financials. Only the materials sector was down on the day.
– Harvey S. Katz, CFA
At the time of this article's writing, the author had a position in AAPL.
