Goldilocks jobs report sees US stocks rise, NASDAQ highest on record, DJIA firms
|- The S&P 500 Index adds 1 percent to 2,945.64 as of 4 p.m. New York time.
- The Dow Jones Industrial Average climbs 0.8 percent.
- the Nasdaq-100 pops 1.6 percent.
U.S. stocks ended the week on a positive note following a strong nonfarm payrolls headline which enabled the Dow Jones Industrial Average (DJIA0, to add 197.16 points, or 0.8%, to 26,504.95, the S&P 500 index higher by 28.12 points, or 1%, at 2,945.64 and the Nasdaq Composite Index COMP putting on 127.22 points, or 1.6%, at 8,164, helped along with gains in Amazon.com Inc., sending the index to an all-time high. For the week, the Nasdaq erased a weekly decline to end with a five-day climb of 0.2% while the S&P 500 index booked a 0.2% weekly gain while the Dow, however, registered a 0.1% decline.
While the nonfarm payrolls at first glance seemed to be a blockbuster on the headline, within the details there were less impressive numbers and a lack of a surge in wages kept alive speculation that the Fed will still be forced to ease policy. Despite the 263K job gains and 3.6% unemployment rate, the dollar weakened. All in all, however, the report was a Goldilocks outcome which should keep optimistic spirits alive on Wall Street for the weeks ahead.
"The April employment report was solid; payroll growth surprised to the upside (+263k) while wage growth was slightly softer than expected. The unemployment rate fell to a cycle-low of 3.6%, but for the wrong reasons as the participation rate slipped. On net, these data should keep the Fed comfortably on hold, in our view," analysts at TD Securities explained.
DJIA levels
Technically, the index was dislodged from the pivot yesterday but made a move back to test bearish commitments. However, stochastics are leaning bearish and a run back to test 26000 will be opening risk towards 25700s. A subsequent break of the 50-D SMA just below 26000 opens risk to the 23.6% Fibo retracement of the late Dec rally at 25500 guarding 25300 (200 D SMA). A break all the way down to the 24800 gap area would come into target ahead of the 24500s and then 50% of the upside run made at the end of Dec at 24150. On the flipside, should bulls follow through and bears capitulate above the pivot, a target of 26800/951(record highs) comes into play.
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