By Anora Mahmudova and Barbara Kollmeyer, MarketWatch
Economy adds 223,000 jobs in April, unemployment rate at
5.4%
U.S. stocks soared in early Friday trade with sentiment getting
a lift from nonfarm-payrolls data, which pointed to a pace of
employment that was healthy enough to suggest that the economy may
be on solid footing but not so much so that the Federal Reserve
might be spurred to hike rates soon.
The U.S. economy added 223,000 jobs last month, while the
unemployment rate fell to 5.4%, largely in line with
expectations.
Scott Wren, senior global equity strategist at Wells Fargo
Investment Institute, said the jobs number was good but not great
and exactly what the market needed to head higher.
"It was a healthy jobs number, indicating the economy is doing
OK, but it's unlikely to sway the Federal Reserve too much," Wren
said.
The solid employment report put the major indexes on track to
finish the week slightly higher after a tumultuous week of
trading.
The S&P 500 (SPX) rose 25 points, or 1.2%, to 2,113 with all
10 main sectors trading higher. The Dow Jones Industrial Average
(DJI) jumped 252 points, or 1.4% to 18,176.03. The Nasdaq Composite
(RIXF) gained 58 points, or 1.2%, to 5,004.61
"Despite the 5.4% unemployment rate, we believe there are still
too many people who are part-time or marginally attached, which is
why we are not seeing wage increases," Wren said.
JJ Kinahan, chief strategist at TD Ameritrade, said stocks may
continue to advance in a low-rate environment as investors chase
richer returns than can be obtained in haven-investment like
bonds.
"It is a good day for the stock market, but I would agree that
the reaction may be a little overdone. As big today's jump is, we
are still not breaking out of the range that we had been stuck for
months," Kinahan said referring to a range of 2,080 and 2,112 on
the S&P 500.
"Certainly, the jobs number took the edge off the disappointing
[gross-domestic product] growth in the first quarter, and there is
more evidence that March was an anomaly and weather related,"
Kinahan added.
Friday's data:April jobs numbers
(http://www.marketwatch.com/story/us-jobs-creation-springs-back-in-april-with-223000-gain-2015-05-08)
reflect a sharp rebound in employment numbers after a revised
85,000 gain in March. The increase in jobs and greater numbers
entering the labor force helped the unemployment rate move to 5.4%
from 5.5%, marking the lowest level since May 2008, the Labor
Department said Friday. Economists polled by MarketWatch had
expected a gain of 228,000 nonfarm jobs.
The average hourly wages rose partly 0.1% last month, while
wages in the past 12 months have risen at a 2.2% rate.
Job report gives Fed green light to move in September
(http://www.marketwatch.com/story/job-report-gives-fed-green-light-to-move-in-september-2015-05-08)
Stocks to Watch:AOL Inc.(AOL) reported first-quarter profit and
sales that beat expectations
(http://www.marketwatch.com/story/aols-stock-climbs-after-profit-sales-beat-expectations-2015-05-08).
Shares jumped 11%.
McDonald's Corp.(MCD) shares rose 2.1% after the company
released April sales numbers, which showed a 0.6% -- less than
expected by analysts.
Nvidia Corp.(NVDA) shares slid 5.3% after the graphics chip
company provided a downbeat sales outlook.
Wal-Mart Stores Inc.(WMT) shares rose 1.2% after the retailer
said it would buy locations in Canada
(http://www.marketwatch.com/story/wal-mart-to-buy-canadian-locations-from-target-2015-05-08-7103642)
from rival Target Corp.(TGT) Target shares also rose 1.2%.
For more on today's notable movers read Movers & Shakers
column
(http://www.marketwatch.com/story/mcdonalds-aol-liberty-media-in-focus-2015-05-08).
Other markets: The FTSE 100 index surged
(http://www.marketwatch.com/storyno-meta-for-guid) on news of an
expected election victory
(http://www.marketwatch.com/story/conservatives-on-course-for-election-victory-in-the-uk-2015-05-08)
in the U.K. for Conservatives. European equity markets rallied,
with the benchmark Stoxx 600 (STXX) index gaining more than 2%.
Chinese stocks suffered their biggest weekly loss, though the
index managed a gain of 2.3% on Friday. That weekly loss is its
worst performance since May 2010.
Oil prices (CLM5) erased earlier gains and were slightly lower.
Gold (GCM5) ticked higher. The British pound
(http://www.marketwatch.com/story/pound-taps-155-as-conservatives-expected-to-win-uk-election-2015-05-08)(GBPUSD)
traded around its highest levels in a week around $1.5430, driven
by news that the Conservative party, viewed as market friendly, is
on course to take power in the U.K. parliament
(http://www.marketwatch.com/story/conservatives-on-course-for-election-victory-in-the-uk-2015-05-08).
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