Daily Stock Market Update — Friday, April 5
Stocks closed broadly higher on Wall Street, closing out another solid week of gains for the market and more in Friday’s Stock Market Update.
Health care and energy companies pulled the market higher Friday. Cigna rose 2.9% and Marathon Petroleum climbed 3.5%.
Traders were encouraged by a report from the Labor Department showing that U.S. employers ramped up hiring last month following meager job additions in February. The unemployment rate remained near a 50-year low of 3.8%.
STOCK MARKET UPDATE
KEEPING SCORE: The S&P 500 rose 13 points, or 0.5%, to 2,892. The index rose 2.1% this week.
The Dow Jones Industrial Average rose 40 points, or 0.2%, to 26,424. The Nasdaq rose 46 points, or 0.6%, to 7,938.
Bond prices rose. The yield on the benchmark 10-year Treasury fell to 2.49%.
JOBS REPORT: The stronger-than-expected jobs report helped smooth concerns about the economy, after February’s report initially said just 20,000 jobs were added during the month, which was sharply below the recent pace. The government on Friday revised that number to growth of 33,000.
Average hourly earnings rose 3.2% in March from a year earlier, which was weaker than economists’ forecasts. Markets pay close attention to the numbers because while higher wages help workers afford to buy more things, they also crimp corporate profit margins.
ENERGIZED RETURNS: Apache climbed 5.9%, EOG Resources rose 5% and Anadarko Petroleum added 4.1% as energy-related stocks plowed higher with the price of crude oil.
The strong jobs report helped expectations for oil demand, and benchmark U.S. crude rose 1.6% to settle at $63.08 a barrel. Brent crude, the international standard, added 1.4% to close at $70.34.
Energy stocks in the S&P 500 jumped 1.6%, by far the biggest gain among the 11 sectors that make up the index.
GAME ON: Snap gained 5.2% after the photography-based social media company announced it is expanding into online games and original entertainment programming.
STALE BREW: The Boston Beer Co. slumped 6.5% after analysts at Goldman Sachs downgraded the beer maker to a “Sell” rating, citing increased competition and sales concerns for craft beer.
UPCOMING EARNINGS: Profitability is one of the market’s top concerns as companies line up to begin reporting their first-quarter results next week.
Analysts expect companies in the S&P 500 to report a nearly 4% drop in earnings per share from a year earlier, which would be the first decline since the spring of 2016.
The expected drop in profits is due almost entirely to weaker profit margins. Analysts are forecasting that revenue grew nearly 5% for S&P 500 companies during the quarter. Companies are holding on to less of each $1 of revenue as profit than a year ago, analysts say.
BREXIT WOES: Britain’s FTSE 100 gained 0.6% after Prime Minister Theresa May requested a further Brexit extension from the European Union until June 30 to give the U.K. breathing room since it is now scheduled to leave the bloc in just one week.
European Council President Donald Tusk proposed a longer time frame, urging the 27 other EU nations to offer the U.K. a flexible extension of up to a year to make sure the nation doesn’t crash out of the bloc in a chaotic and costly way.
The CAC 40 in France and Germany’s DAX each rose 0.2%.
BOND WATCH: Treasury yields wavered following the jobs report.
The yield on the 10-year Treasury tends to rise and fall with expectations for the U.S. economy and inflation, and it had been largely falling since last autumn as worries about a possible recession grew. After hitting a bottom at 2.37% last week, though, it had begun to recover.
On Friday, the yield on the 10-year Treasury climbed as high as 2.54% in the minutes following the job report’s release, up from 2.51% late Thursday. But the gains evaporated, and it subsequently dipped down to 2.50%.
The yield on the two-year Treasury, whose movements are more closely tied to the Fed’s actions, also bounced up and down following the jobs report. It was at 2.34%, up from 2.32% late Thursday.
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