US Stocks May Continue ro Benefit drom Upbeat Jobs Data

June 4, 2018
US Stocks May Continue ro Benefit drom Upbeat Jobs Data

By Investors Hub

The major U.S. index futures are pointing to a higher opening on Monday, with stocks likely to add to the strong gains posted last Friday.

The markets may continue to benefit from the upbeat employment data released last Friday despite lingering concerns about a potential trade war.

Stocks showed a strong move to the upside during trading on Friday as traders reacted to upbeat employment data. With the upward move on the day, the tech-heavy Nasdaq reached its best closing level in well over two months.

The major averages remained firmly positive going into the close of trading. The Dow advanced 219.37 points or 0.9 percent to 24,635.21, the Nasdaq spiked 112.21 points or 1.5 percent to 7,554.33 and the S&P 500 surged up 29.35 points or 1.1 percent to 2,734.62.

For the holiday-shortened week, the major averages turned in a mixed performance. While the Dow fell by 0.5 percent, the Nasdaq jumped by 1.6 percent and the S&P 500 rose by 0.5 percent.

The strength on Wall Street came following the release of a report from the Labor Department showing stronger than expected job growth in the month of May.

The Labor Department said non-farm payroll employment surged up by 223,000 jobs in May after climbing by a downwardly revised 159,000 jobs in April.

Economists had expected employment to increase by 188,000 jobs compared to the addition of 164,000 jobs originally reported for the previous month.

With the stronger than expected job growth, the unemployment rate edged down to 3.8 percent in May from 3.9 percent in April. The unemployment rate had been expected to come in unchanged.

The modest decrease pulled the unemployment rate down to its lowest level since a matching rate in April of 2000.

Additionally, the Institute for Supply Management released a report showing growth in manufacturing activity accelerated by more than expected in the month of May.

The ISM said its purchasing managers index climbed to 58.7 in May from 57.3 in April, with a reading above 50 indicating growth in the manufacturing sector. Economists had expected the index to rise to 58.1.

Stocks remained firmly positive late in the session as President Donald Trump revealed that his summit with North Korean leader Kim Jong Un is back on.

Trump told reporters that the meeting with the North Korean leader will indeed be held in Singapore on June 12th.

Last week, Trump called off the planned meeting with Kim, accusing North Korea of displaying “tremendous anger and open hostility.”

Most of the major sectors moved to the upside on the day, although considerable strength was visible among computer hardware stocks. Reflecting the strength in the sector, the NYSE Arca Computer Hardware Index jumped by 2.4 percent.

Semiconductor stocks also showed a significant move to the upside, driving the Philadelphia Semiconductor Index up by 2.3 percent to its best closing level in over two months.

Steel, chemical, and biotechnology stocks also saw notable strength, while utilities stocks were among the few groups to buck the uptrend.

Dipo Olowookere

Dipo Olowookere is a journalist based in Nigeria that has passion for reporting business news stories. At his leisure time, he watches football and supports 3SC of Ibadan.

Mr Olowookere can be reached via [email protected]

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