Encouraging non-farm payroll data boosted investor sentiment
and lifted benchmarks higher on Friday. Positive sentiments were
also fueled by encouraging reports on the manufacturing sector
and construction spending. These factors combined to propel the
blue-chip index to its highest level in more than five years. All
ten sectors of the S&P 500 industry groups finished in the
green with the financial sector emerging as the biggest
The Dow Jones Industrial Average (DJI) gained 1.1% to close
the day at 14,009.79. The S&P 500 rose 1% to finish
yesterday's trading session at 1,513.17. The tech-laden Nasdaq
Composite Index increased 1.2% to end at 3,179.10. The fear-gauge
CBOE Volatility Index (VIX) decreased 9.7% to settle at 12.90.
Consolidated volumes on the New York Stock Exchange, American
Stock Exchange and Nasdaq were roughly 6.35 billion shares, lower
than the daily average of 6.45 billion shares in 2012. Advancing
stocks outnumbered the decliners on the NYSE. For 74% stocks that
advanced, 23% declined.
Jobs data provided investors with much needed respite.
Following weak initial claims data and a disappointing GDP report
last week, sentiments were quite low. But jobs data released on
Friday helped the S&P 500 finish in the green for the fifth
consecutive week. The index is only 60 points behind its highest
intraday level of 1,576.09. The Dow finished its trading session
on Friday above the 14,000 mark for the first time in five years
and is 1.1% below its highest level achieved in October 2007.
Meanwhile, the U.S. Bureau of Labor Statistics reported that
non-farm payroll employments rose by 157,000 in the month of
January. This was slightly below the consensus estimate of
158,000. According to the report, the increase in January
non-farm payroll employments was boosted by positive
contributions from retail trade, construction and health care.
However, the unemployment rate increased marginally by 0.1% to
7.9%. The Labor Department also said 127,000 more jobs were added
in November and December than initially reported.
The manufacturing sector also added to positive investor
sentiment on Friday. According to the Institute of Supply
Management, the PMI stood at 53.1%, up 2.9% from December's data
beating the consensus estimate of 50.4. The main growth drivers
among this index were new orders, production and employment. New
orders grew 3.6% to 53.3, production rose 1% to 53.6 while the
employment index increased 2.1% to 54.0. The U.S. manufacturing
index was at a nine-month high.
According to the U.S. Department of Commerce, construction
spending increased 0.9% to $885.0 billion in December versus
$876.9 billion in November. On an annual basis in 2012,
construction spending was $850.2 billion compared with $778.2
billion spent in 2011. Private construction spending rose 2.0% to
$614.9 billion. Public construction spending increased 1.4% to
Among earnings results, shares of Perrigo Company (NASDAQ:
) surged 4.8% after the company's second quarter earnings beat
the Street's expectations. According to Thomson Reuter's data,
252 S&P 500 companies have posted their earnings, among which
69% of them have reported earnings above the Street's
The financial sector was the biggest gainer among the S&P
500 industry groups and the Financial Select Sector SPDR (XLF)
gained 1.3%. Stocks such as Bank of America Corp (NYSE:
), JPMorgan Chase & Co. (NYSE:
), Goldman Sachs Group, Inc. (NYSE:
), Citigroup Inc. (NYSE:
) and State Street Corporation (NYSE:
) increased 3.5%, 1.7%, 1.4%, 2.0% and 1.3%, respectively.
BANK OF AMER CP (BAC): Free Stock Analysis
CITIGROUP INC (C): Free Stock Analysis Report
GOLDMAN SACHS (GS): Free Stock Analysis
JPMORGAN CHASE (JPM): Free Stock Analysis
PERRIGO COMPANY (PRGO): Free Stock Analysis
STATE ST CORP (STT): Free Stock Analysis
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