1 hour ago
Toru Hanai / Reuters
A man walks past a stock quotation board displaying Japan's Nikkei share average outside a brokerage in Tokyo July 5, 2013.
U.S. trading was choppy Friday as investors weighed a better-than-expected June jobs report against worries about the end of ample help from the Federal Reserve.
Still, stocks climbed higher: The Dow Jones Industrial Average is well above the 15,000 level, supported by American Express, Hewlett-Packard and JPMorgan.
The S&P 500 and the Nasdaq are also firmly higher. The CBOE Volatility Index (VIX), widely considered the best gauge of fear in the market, traded below 16. The S&P 500 is sitting just below its 50-day moving average of 1626. Moving above that trend line could push stocks higher, say traders.
Stocks have see-sawed all day given the thin volumes. "I wouldn't be shocked to see a little volatility," Ryan Detrick, senior technical strategist at Schaeffer's Investment Research, said.
Among S&P sectors, financials and industrials are leading the advance, while utilities and staples are falling.
Small-cap stocks and regional banks are among the market leaders. "These are the sectors you want to see leadership from," Detrick said, since they are closely tied to the U.S. domestic economy.
Home builders were among the weakest industry groups as investors fret about what higher interest rates will mean for the housing recovery.
The U.S. economy created 195,000 new non-farm payroll jobs in June, the Labor Department reported, after an upwardly revised 195,000 jobs were created in May and 199,000 were created in April.
The unemployment rate was unchanged at 7.6 percent as more people entered the labor market.
The jobs report means the economy is improving and it's on track to at least pick up a little bit of momentum, Robert Pavlik, Banyan Partners' chief market strategist, told CNBC.
"I think the market is going to continue to move higher even as we approach the July meetings," he said. But as it gets closer to September "the possibility that market gets a little bit worried about the move up in Treasury yields comes back into play."
The dollar jumped to a three-year high and 10-year Treasury yields pushed above 2.70 percent given the stronger data and growing anticipation of Fed tapering.
(Read More: Why Higher US Yields Should Cheer Investors)
"Combing through the details of the release, there is not too much to sniff at, and overall, the June report easily gets passing marks," JPMorgan economist Michael Feroli wrote in a research note, adding "after today's report we are moving to a call for a first reduction in asset purchases at the September FOMC meeting."
Markets had been awaiting the jobs report for clues as to when the Federal Reserve would begin reducing its bond purchases. The Fed has said it expects to end its $85 billion monthly asset purchases when the unemployment rate drops to around 7 percent.
Jan Hatzius, Goldman Sachs chief economist, also is now calling for a September tapering. "It's not a done deal. It could still be December," he told CNBC. "But when I take everything together?what they've said, what you've seen in the numbers? September is more likely."
While the U.S. central bank may be closer to pulling back on the bond purchases, yesterday, both the European Central Bank and the Bank of England offered forward guidance on policy for the first time, and said record-low interest rates would be maintained for a prolonged period.
(Read More:July 4: Independence Day for Europe's Central Banks?)
Pavlik of Banyan Partners isn't expecting a blowout earnings season. "I think that Q2 earnings season is largely going to be a repeat of Q1 and you will see a good increase in earnings per share, but you're not going to see a tremendous increase in revenue which could create problems for the intermediate term," he said. "But short term I think the market moves higher."
?Follow CNBC's Justin Menza on Twitter @JustinMenza.
More business news:
Follow NBCNews.com business onTwitter and Facebook
nationwide race wanderlust gone tyler perry good deeds pretty in pink shark tank john wall
No comments:
Post a Comment
Note: Only a member of this blog may post a comment.