Benchmarks discounted the mixed jobs data on Friday to eke out
modest gains that were sufficient to guide the Dow and S&P
500 to record highs. The jobs report showed that pace of hiring
decreased in July. However, the unemployment rate declined to its
lowest level since Dec 2008. Mixed jobs numbers may make the
Federal Reserve more careful about trimming its bond buying
program in the future. Meanwhile, factory orders for the month of
June increased for the third consecutive month. While the
consumer discretionary sector emerged the biggest gainer among
the S&P 500 industry groups, industry heavy-weight Chevron's
dismal earnings dragged the energy sector to be the worst
For a look at the issues currently facing the markets, make
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Ahead of Wall Street
The Dow Jones Industrial Average (DJI) gained 0.2% to close
the day at 15,658.36. The S&P 500 increased 0.2% to finish
Friday's trading session at 1,709.67. The tech-laden Nasdaq
Composite Index gained 0.4% to end at 3,689.59. The fear-gauge
CBOE Volatility Index (VIX) tumbled 7.4% to settle at 11.98.
Consolidated volumes on the New York Stock Exchange, American
Stock Exchange and Nasdaq were roughly 5.68 billion shares, lower
than 2013's average of 6.4 billion shares. Advancing stocks
outnumbered the decliners. For the 52% shares that advanced, 45%
Disappointing non-farm payrolls numbers initially dragged the
major indices into the red. However, stocks trimmed those losses
in the later part of the day to finish modestly higher. According
to the U.S Department of Labor, non-farm payroll employment rose
by 162,000 in July as against expectations of 183,000 gains.
June's figure was revised down to 188,000 from 195,000.
Nonetheless, unemployment rate hit its lowest level in more than
four years as it dropped to 7.4% from June's 7.6%. Employment
increased in retail trade, food services and drinking places,
financial activities, and wholesale trade.
Going further into the details of non-farm payroll employment
report, jobs in retail trade increased 47,000; whereas employment
in financial activities rose by 15,000. Wholesale trade and
professional and business services added 14,000 and 36,000,
respectively. Employment in manufacturing and health care was
essentially unchanged in July. The Fed will now assess the July
employment numbers while deciding the right time to trim its bond
buying program. Most experts expect the central bank to start
scaling back its stimulus program in
Meanwhile, the U.S Department of Commerce reported that new
orders for U.S factory goods increased 1.5% in June after
increasing 3% in May. May's figure was upwardly revised to 3%
from the previous estimate of 2.1%. This figure was below the
consensus estimate of 2.2%. Pace of manufacturing decelerated due
to tight fiscal policy and poor global demand.
On the earnings front, Chevron Corporation (NYSE:
) reported its second quarter results on Friday. The
company's earnings came in below the Street's estimates.
Chevron's earnings declined 26% in the second quarter due to
higher costs and low demand for crude oil and refined products.
The company's second quarter net income declined to $5.37 billion
from the year-ago figure of $7.21 billion. Shares slipped 1.2%
after the announcement of its quarterly results. According to
Thomson Reuters data, 391 companies of the S&P 500 companies
have reported their quarterly results, among which 67.8% outpaced
earnings estimates. Around 55% of these companies have reported
revenues above the Street's estimates
Energy sector was the biggest loser among the S&P 500
industry groups. Energy Select Sector SPDR (XLE) lost 0.4%.
Stocks such as Exxon Mobil Corporation (NYSE:
), Hess Corp. (NYSE:
), Marathon Petroleum Corp (NYSE:
) and Valero Energy Corporation (NYSE:
) slipped 0.8%, 1.0%, 4.2% and 2.7%, respectively.
The consumer discretionary stocks were the best performers on
Friday and the Consumer Discretionary SPDR (XLY) added 0.7%.
Stocks such as The Walt Disney Company (NYSE:
), News Corp (NASDAQ:
), Time Warner Inc (NYSE:
) and DISH Network Corp (NASDAQ:
) gained 1.8%, 0.8%, 2.0% and 0.85%, respectively.
CHEVRON CORP (CVX): Free Stock Analysis
DISNEY WALT (DIS): Free Stock Analysis Report
DISH NETWORK CP (DISH): Free Stock Analysis
HESS CORP (HES): Free Stock Analysis Report
MARATHON PETROL (MPC): Free Stock Analysis
NEWS CORP NEW-A (NWSA): Get Free Report
TIME WARNER INC (TWX): Free Stock Analysis
VALERO ENERGY (VLO): Free Stock Analysis
EXXON MOBIL CRP (XOM): Free Stock Analysis
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