US close: Wall Street ends on mixed note despite strong jobs report
Wall Street finished the week comfortably higher even after the release of a much stronger-than-expected October jobs report that put the possibility of a December interest rate hike by the US Federal Reserve back on the table.
The S&P 500 finished the week 1% higher and climbed to within just 20 points of its all-time highs as Fed funds futures moved to price in a 70% chance the US central bank would tighten policy at its next meeting.
On Friday, the Dow Jones Industrial gained 46.90 points to 17,910.33, the S&P 500 drifted fractionally lower by 0.73 points to end at 2,099.20 and the Nasdaq Composite advanced 19.38 points to 5,147.12.
The best performing sectors were: Investment services (3.2%), Banks (2.81%) and Life insurance (2.79%).
According to the Bureau of Labor Statistics, 271,000 jobs were added last month, the biggest monthly gain of the year, compared with analysts’ expectations for a 180,000 figure, while the unemployment rate fell to a seven-year low of 5% from 5.1% in the previous month.
"Regardless of the exact timing of the first rate hike, we still believe that the big story next year will be an unexpectedly strong pick-up in wage growth and price inflation, which will force the Fed into a much more aggressive policy tightening cycle than the Fed’s projections currently suggest," said Paul Ashworth, chief US economist at Capital Economics.
Meanwhile, the average hourly wage paid to US employees rose 0.4% last month, registering the biggest yearly increase since mid-2009.
The average American worker earned $25.20 an hour in October, a 9% month-on-month increase.
On a year-on-year basis, hourly wages rose 2.5% in October, compared with an upwardly revised 2.3% gain in September and analysts’ expectations for a 2.3% reading.
With non-farm payrolls surging past expectations, analysts believe the Fed is now firmly odds on to raise interest rates next month.
"The conclusion to take from the NFP on Friday is that the probability of a US rate hike in December has inflated considerably," said FXTM research analyst Lukman Otunuga.
"Dollar strength may resonate throughout the global currency markets and positive economic data release from the States fuel the bullish sentiments market participants already have towards the dollar."
Mixed earnings reports
In company news, Nvida surged 14% after its quarterly results beat expectations late on Thursday, while TripAdvisor plunged 7% after its quarterly profit fell short of estimates.
Walt Disney climbed 2.36%, despite reporting lower-than-expected revenue, while Kraft Heinz shed 3.25% after its quarterly profit missed forecasts, although the food and beverage giant lifted its dividend.
ZS Pharma jumped 41% after AstraZeneca revealed it had agreed to pay $2.7bn for the biotech group, while DuPont edged 2.1% higher after saying it was in separate talks with Dow Chemical and Syngenta over a potential combination of agricultural units.
Elsewhere, European stocks declined, while Asian equity markets closed mostly higher, as Chinese stocks rallied.
The dollar surged 1% against both the pound and the yen and gained 0.31% against the euro, while gold futures retreated by $15.5 to $1,087.70.
Oil prices headed lower, with West Texas Intermediate sliding 76 cents to $78.56 a barrel on the NYMEX.
S&P 500 - Risers
Qorvo, Inc. (QRVO) $55.55 +23.23%
Nvidia Corp. (NVDA) $31.55 +13.86%
Monster Beverage Corp (MNST) $150.24 +13.61%
Teradata Corp. (TDC) $28.83 +12.71%
Skyworks Solutions Inc. (SWKS) $85.99 +7.11%
Avago Technologies Ltd. (AVGO) $129.67 +7.11%
Genworth Financial Inc. (GNW) $4.73 +7.01%
Endo International Plc (ENDP) $55.30 +6.96%
Charles Schwab Corp. (SCHW) $33.51 +6.15%
Ralph Lauren Corp (RL) $137.24 +5.16%
S&P 500 - Fallers
TripAdvisor Inc. (TRIP) $77.42 -6.85%
Freeport-McMoRan Inc (FCX) $10.75 -6.36%
Activision Blizzard Inc. (ATVI) $35.00 -6.32%
Ventas Inc. (VTR) $50.82 -6.22%
Welltower Inc (HCN) $61.02 -6.01%
Peabody Energy Corp. (BTU) $14.59 -5.81%
Centerpoint Energy Inc. (CNP) $17.46 -5.67%
Mohawk Inds Inc. (MHK) $187.14 -5.23%
Consolidated Edison Inc. (ED) $61.95 -5.20%
Duke Energy Corp. (DUK) $67.76 -5.16%
Dow Jones I.A - Risers
Goldman Sachs Group Inc. (GS) $199.17 +3.72%
JP Morgan Chase & Co. (JPM) $68.46 +3.04%
Walt Disney Co. (DIS) $115.67 +2.36%
E.I. du Pont de Nemours and Co. (DD) $66.11 +2.01%
Microsoft Corp. (MSFT) $54.92 +0.99%
General Electric Co. (GE) $29.92 +0.94%
American Express Co. (AXP) $74.30 +0.50%
McDonald's Corp. (MCD) $113.31 +0.41%
Wal-Mart Stores Inc. (WMT) $58.78 +0.29%
Home Depot Inc. (HD) $125.98 +0.21%
Dow Jones I.A - Fallers
Unitedhealth Group Inc. (UNH) $114.81 -1.22%
International Business Machines Corp. (IBM) $138.25 -1.17%
Procter & Gamble Co. (PG) $75.57 -1.07%
Verizon Communications Inc. (VZ) $45.78 -0.91%
Coca-Cola Co. (KO) $41.96 -0.87%
Merck & Co. Inc. (MRK) $54.61 -0.80%
Travelers Company Inc. (TRV) $113.10 -0.76%
Pfizer Inc. (PFE) $33.93 -0.64%
Visa Inc. (V) $78.75 -0.64%
Chevron Corp. (CVX) $94.03 -0.55%
Nasdaq 100 - Risers
Nvidia Corp. (NVDA) $31.55 +13.86%
Monster Beverage Corp (MNST) $150.24 +13.61%
Skyworks Solutions Inc. (SWKS) $85.99 +7.11%
Avago Technologies Ltd. (AVGO) $129.67 +7.11%
QUALCOMM Inc. (QCOM) $53.42 +4.60%
Whole Foods Market Inc. (WFM) $31.11 +3.32%
JD.com, Inc. (JD) $29.70 +3.13%
Broadcom Corp. (BRCM) $53.79 +3.07%
Cognizant Technology Solutions Corp. (CTSH) $69.05 +2.80%
Biomarin Pharmaceutical Inc. (BMRN) $114.92 +2.31%
Nasdaq 100 - Fallers
Incyte Corp. (INCY) $100.21 -14.17%
TripAdvisor Inc. (TRIP) $77.42 -6.85%
Activision Blizzard Inc. (ATVI) $35.00 -6.32%
Vimpelcom Ltd Ads (VIP) $3.52 -5.12%
Kraft Heinz Co. (KHC) $72.01 -4.52%
Vertex Pharmaceuticals Inc. (VRTX) $117.96 -3.24%
Celgene Corp. (CELG) $116.74 -3.09%
Yahoo! Inc. (YHOO) $34.20 -2.62%
Electronic Arts Inc. (EA) $72.38 -2.27%
Ross Stores Inc. (ROST) $50.40 -2.21%