Stock Market News for Dec 9, 2019

Benchmarks closed higher on Friday after the Labor Department reported solid monthly jobs data for November. Additionally, President Trump’s upbeat comment on U.S.-China trade deal and China’s decision to reduce import tariffs on some soybeans and pork shipments boosted investor’s sentiments.

The Dow Jones Industrial Average (DJI) gained 1.2% to close at 28,015.06. The S&P 500 added 0.9% to close at of 3,145.91. Meanwhile, the Nasdaq Composite Index closed at 8,656.53, rising 1%. The fear-gauge CBOE Volatility Index (VIX) increased 2.7% to close at 13.13. Advancing issues outnumbered decliners on the NYSE by a 3.29-to-1 ratio. On Nasdaq, a 2.89-to-1 ratio favored advancers.

How Did the Benchmarks Perform?

The S&P 500 was 0.3% away from hitting an all-time record high, while, the Dow and Nasdaq are both 0.6% off their records. In short the strong job data and Stocks also closed just below their record highs reached Nov 27. News of the easing trade war pushed trade-sensitive Philadelphia Semiconductor index to rise 1.5% and the broader technology sector rose 1.1%.

The S&P index recorded 52 new 52-week highs with no new low. The Nasdaq recorded 104 new highs and 33 new lows.

U.S. Adds 266,000 Jobs in November

According to figures released by the Labor Department on Dec 6, the U.S. economy added 266,000 new jobs in November, beating the consensus estimate of 188,000. This is the biggest monthly gain since January this year. The reports also showed that job additions in October were revised to 156,000 from 128,000 and September had added 193,000 jobs instead of the previously reported 180,000.

Job addition in healthcare, hotels and restaurants, and professional services were highest as the sectors added 60,000, 45,000 and 38,000 jobs, respectively. The addition in new jobs specifically in the manufacturing sector was boosted after General Motors Company’s GM autoworkers called off strike. This Zacks Rank #3 (hold) company added roughly 50,000 jobs in November. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

On the other hand, the unemployment rate fell to 3.5%. Even though the value matches its lowest level since 1969, it fails to beat the consensus estimate of 3.6%. Despite the drop, low unemployment rate points at a robust labor market, even though economic growth has slowed.

The average hourly wage rose 7 cents to $28.29 per hour adding 0.2%. However, the 12-month rate of hourly wage gains dropped to 3.1% from 3.2% in the previous month.

Additionally, The U.S. consumer sentiments seem to be improving as the University of Michigan’s gauge of consumer sentiment rose to a preliminary December reading of 99.2. The index rose from a final November reading of 96.8 and beats the consensus estimate of 96.9. This reading gives a hint about consumer spending which is the backbone of the U.S. economy.

Exchange of Olive Branch on Trade Front

Mixed signals on the U.S.-China trade front this week had made benchmarks finish in the negative territory after hitting record highs. However, Trump’s statement on Thursday indicated that the economic giants are inching closer to a “phase one” trade deal.

Investors’ sentiment especially got lifted on Friday, as China said that it will reduce import tariffs on some soybeans and pork shipments from America.

Weekly Roundup

The S&P 500 ended the weekly trading session losing 0.7%, however, Friday’s strong gains boosted the index to recover the losses made throughout the week. After Friday’s trading session ended the Dow and Nasdaq were down only 0.1% each. Both the indexes were down more than 1% week to date at the beginning of Friday’s session. The market remained highly volatile from mixed signals of U.S.-China trade deal and mixed economic data.

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