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Stock Market News for May 10, 2021

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·4 min read
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The Dow and the S&P 500 hit new records on Friday after a disappointing jobs report in April eased concerns over prospects for rise in interest rates. The Nasdaq also ended in the green led by gains in technology stocks.

The Dow Jones Industrial Average (DJI) rose 229.23 points, or 0.7%, to close at 34,777.76 and the S&P 500 rose 30.98 points, or 0.7%, to close at 4,232.60. The Nasdaq Composite Index closed at 13,752.24, adding 119.39 points, or 0.9%. The fear-gauge CBOE Volatility Index (VIX) decreased 9.2%, to close at 16.69. Advancing issues outnumbered declining ones for 3.27-to-1 ratio on the NYSE, while a 2.12-to-1 ratio on the Nasdaq favored advancers.

How Did the Benchmarks Perform?

The Dow established an intraday record high at 34,811.39 and posted its 24th record close this year. The blue-chip index’s highest gainers were NIKE, Inc. NKE and The Boeing Company BA that closed 3.2% and 2.5% higher, respectively on Friday. Additionally, shares of Cisco Systems, Inc. CSCO, The Walt Disney Company DIS and Caterpillar Inc. CAT jumped at least 1.5% for the session.

The S&P 500 also hit a record high on Friday and all of its 11 major sectors closed in the green. The energy sector emerged as the highest gainer rising 1.9% for the session, joined by at least a 1.1% rise in the real estate and industrials sectors.

While the Nasdaq was unable to break its third consecutive weekly decline streak, it did close in the positive for the session after jumping 0.9%. Among its highest gainers were Match Group, Inc. MTCH and Ross Stores, Inc. ROST that rose 4.5% and 3% for the day. Both the stocks carry a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Overall, the S&P 500 posted 164 new 52-week highs and one new low, while the Nasdaq Composite recorded 164 new highs and 64 new lows. A total of 10.23 billion shares were traded on Friday, higher than the last 20-session average of 10.11 billion.

Disappointing Job Addition in April

On Friday, the U.S. Labor Department reported that 266,000 new jobs were added in April, which is much lower than the consensus estimate of 1.035 million job additions. March’s job additions were also revised downward to 770,000 from 916,000. The organization also reported that the unemployment rate rose to 6.1% in April, the first increase in 13 months and higher than the consensus estimates of 5.7%.

Per the report, even as the economy is in the path of its great recovery, companies might be struggling to fill up job openings even with millions still unemployed. Notably, leisure and hospitality (hotels, restaurants, theaters, amusement parks), and local government education have witnessed job gains in April but were offset by the decline in temporary services, retail, health care, transportation and manufacturing.

However, the disappointing jobs report eased investors’ recent doubts regarding the Federal Reserve’s commitment to keep interest rates low and maintain monetary policies even with inflation rises this year as the economy recovers from the pandemic. This helped the Dow hit another new record high on Friday.

Weekly Roundup

For the week ending May 7, the Dow and the S&P 500 closed 2.7% and 1.2% higher, respectively. The blue-chip Dow recorded its biggest weekly percentage gain since March and snapped its two-week losing streak, while the broader index marked its second straight weekly gain. On the other hand, the Nasdaq slipped 1.5% for the third consecutive week.

Last week markets have rallied and fueled major indexes to hit all-time highs on continued economic recovery supported by a decline in coronavirus cases, vaccine roll-out, and better-than-expected earnings report. As of May 7, 88% of the S&P 500 members have reported the first-quarter 2021 earnings and total earnings and revenues have jumped 46.6% and 9.8%, respectively from the same period last year. (Read More)

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NIKE, Inc. (NKE) : Free Stock Analysis Report
 
Cisco Systems, Inc. (CSCO) : Free Stock Analysis Report
 
The Boeing Company (BA) : Free Stock Analysis Report
 
Caterpillar Inc. (CAT) : Free Stock Analysis Report
 
Ross Stores, Inc. (ROST) : Free Stock Analysis Report
 
The Walt Disney Company (DIS) : Free Stock Analysis Report
 
Match Group Inc. (MTCH) : Free Stock Analysis Report
 
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