May's Jobs Report Keeps the New-High String Alive

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"After the European Central Bank announcement came and passed, all eyes were on this morning's nonfarm payrolls report," noted Schaeffer's Senior Equity Analyst Joe Bell, CMT. "While the number didn't blow out expectations, the report showed a continuation of the slow jobs growth that we have become accustomed to. The market continued its momentum from yesterday, as small-cap stocks displayed strong leadership for the second day in a row." Meanwhile, both the S&P 500 Index (SPX) and the Dow Jones Industrial Average (DJI) kept their streak of new highs alive, visiting uncharted territory in intraday trading and settling at brand-new peaks.

Continue reading for more on today's market, including :

Trading Topic of the Week -- Trading Low-Priced Options: DO trade stocks with a favorable sentiment backdrop . At Schaeffer's, we use sentiment analysis to determine whether a stock's current trend is likely to continue. To maximize returns, we focus our efforts on outperforming stocks surrounded by skepticism, and lagging equities that continue to attract bullish attention.

The Dow Jones Industrial Average (DJI - 16,924.28) closed at its all-time intraday high, gaining 88.2 points, or 0.5%, on the day. On a weekly basis, the index rallied 1.2%. American Express Company (AXP) led the Dow's 21 advancers with a 2.3% gain; Pfizer Inc. (PFE) slipped 1.1% to pace the nine decliners.

The S&P 500 Index (SPX - 1,949.44) also closed at its high-water mark of the day, moving up 9 points, or 0.5%. Not to be left out, the Nasdaq Composite (COMP - 4,321.40) rose 25.2 points, or 0.6%. This week, the SPX rose 1.3% -- ending the week in new-high territory -- while the COMP gained 1.9%.

Contrarily, the CBOE Volatility Index (VIX - 10.73) closed at its intraday low, hitting its lowest point since February 2007. On the day, the market's "fear gauge" dropped 1 point, or 8.1%, and lost 5.9% for the week.

CLOSING SUMMARY - INDICES

CLOSING SUMMARY - NYSE AND NASDAQ

A Trader's Take :

"The Russell 2000 Index (RUT) once again showed relative strength and finished the week on a very strong note," added Bell. "With most major indexes continuing to make new all-time highs, the small-caps still have a lot of catching up to do."

5 Items on Our Radar Today :

  1. May's nonfarm payrolls report revealed that 217,000 jobs were created in the U.S. last month, roughly in line with estimates. The unemployment rate, meanwhile, stayed at 6.3%, versus expectations for a slight increase. The labor market has now officially recovered all 8.7 million jobs lost during the 2008 financial crisis and subsequent recession. (FOX Business )
  2. Sprint Corporation (S) and T-Mobile US Inc (TMUS) -- the nation's third- and fourth-largest wireless carriers, respectively -- are reportedly growing ever-closer to combining forces. Merger speculation has surrounded the two names for some time, but sources now say a $32 billion deal is growing closer to reality. Under a preliminary agreement, S would technically acquire TMUS for roughly $40 per share in cash and stock. (Forbes)
  3. One of today's biggest market movers was Hertz Global Holdings, Inc. ( HTZ ) , which declined on news that the company will have to sort through three years' worth of accounting errors.
  4. Call options are becoming increasingly popular on Facebook Inc (FB) , as the stock continues to bounce from its April lows.
  5. Underperforming Zynga Inc (ZNGA) -- which has dropped significantly during the last three months -- was swatted with a price-target cut earlier today.

EARNINGS

For a look at today's options movers and commodities activity, head to page 2.

STOCKS - NOTABLE CALL ACTIVITY

STOCKS - NOTABLE PUT ACTIVITY

Commodities :

July crude futures enjoyed a modest boost from the U.S. nonfarm payrolls report and subsequent hopes for increased energy demand. By the close, black gold had tacked on 18 cents, or 0.2%, to $102.66 per barrel. Week-over-week, oil edged down 0.05%.

August-dated gold futures were lower on the day, slipping 80 cents, or 0.1%, to $1,252.50 an ounce. The precious metal managed to gain ground for the week, however, rising 0.5% from last Friday's close.

SCHAEFFER'S MARKET POSTURE



The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.

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This article appears in: Investing , Options

Referenced Stocks: AAPL , GM , TWTR , BAC , HTZ

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