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Stock Market News For Apr 8, 2019

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Wall Street closed on a positive note on Friday following strong U.S. job data for March and investor’s optimism about a possible solution to trade tensions. All three major stock indexes finished in the green. Indexes also recorded second consecutive weekly gains.

The Dow Jones Industrial Average (DJI) closed at 26,424.99, gaining 0.2%. The S&P 500 Index (INX) rose 0.5% to close at 2,892.74. Meanwhile, the Nasdaq Composite Index (IXIC) closed at 7,938.69, increasing 0.6%. A total of 6.24 billion shares were traded on Friday, lower than the last 20-session average of 7.33 billion shares. Advancing outnumbered decliners on the NYSE by 2.81-to-1 ratio. On the Nasdaq, advancers had an edge over decliners by 2.28-to-1 ratio.  The CBOE VIX decreased 5.6% to close at 12.82. 

How Did the Benchmarks Perform?

The Dow ended in positive territory with 23 stocks of the 30-stocks blue-chip index finishing in the green while seven ended in the red. The tech-heavy Nasdaq Composite finished in the green due to strong performance by large-cap tech stocks.

The S&P 500 also closed in the green marking its highest closing since Oct 9. The broad-market index also registered winning run for seven consecutive days, first time since October 2017. The Energy Select Sector SPDR (XLE) and Utilities Select Sector SPDR (XLU) gained 1.8% and 0.9%, respectively.  Notably, ten out of eleven sectors of the benchmark index closed in the green and one finished in the red.

Strong Job Data

On Apr 5, the Bureau of Labor Statistics reported that U.S. non-farm job additions for the month of March came in at 196,000, higher than the consensus estimate of 184,000. This was a tremendous improvement from February’s data which was revised upward to 33,000 from 20,000 reported earlier. Healthcare sector added 49,000 jobs followed by 34,000 by professional and technical services, 27,000 by restaurants and 16,000 by construction. Unemployment rate remained flat at 3.8% at par with the consensus estimate.

The hourly wage rate increased 0.1% or 4 cents to $27.70. This figure fell below the consensus estimate of an increase of 0.2%. The metric also registered a 3.2% year over year increase.

Optimism on Trade War Front

The year-long tariff disputes between United States and China is likely heading for a solution. On Apr 6, President Donald Trump’s top economic adviserLarry Kudlow said the United States and China are “closer and closer” to a trade deal.

Per China’s Xinhua News Agency, Chinese President Xi Jinping has written in a letter to President Trump calling for negotiations to end the trade dispute as soon as possible. President Trump said that the U.S.-China trade deal “have a ways to go, but not very far.”

On Apr 4, President Trump said “we'll know over the next four weeks'’ if a deal with China happens, after stating that negotiations are moving forward in the right direction.

Following positive development, trade sensitive stock like Apple Inc. AAPL and Deere & Co. DE increased 0.7% and 0.5%, respectively. Both stocks carry a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Weekly Roundup

Wall Street rally continued for the second consecutive weeks as all three major stock indexes ended in green. The Dow, S&P 500 and Nasdaq Composite gained 1.9%, 2.1% and 2.7%, respectively in the last week. Strong job data, positive developments on U.S- China trade conflict and a less volatile yield curve for government bonds negated recessionary fears and strengthened investors’ confidence in risky assets like equities.

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