Jobs Report Sends Stock Market Higher, S&P 500 To New High; These Hot Stocks Cool Off

A strong June jobs report sent the stock market to early gains Friday, and the S&P 500 to another all-time high. But breadth was shallow despite market gains.

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The S&P 500 climbed 0.3%, marking its seventh consecutive record high. The Nasdaq composite added 0.4% as the technology sector was back in favor. Technology Select Sector SPDR ETF (XLK) rose 0.9% to lead all S&P sectors.

The Dow Jones Industrial Average rose 0.1%. Dow component Apple (AAPL) climbed 1.3%, giving itself a bit of room above a 137.17 buy point. But the breakout has been quiet so far. Apple rose despite news that Spanish regulators are probing possible anticompetitive practices by the company, and by Amazon.com (AMZN), in online sales of electronic products.

Walgreens Boots Alliance (WBA) fell nearly 2% more this morning, helping to hold back the Dow. The stock had plunged Thursday after reporting earnings, and is nearing its 200-day moving average.

Volume fell on the NYSE and Nasdaq compared with the same time on Thursday. Market gains were shallow, though: Declining stocks topped advancers by nearly 2-1 on the NYSE and by 7-5 on the Nasdaq.

Small caps lagged as the Russell 2000 lost 0.7% in the first 45 minutes of trading.

Jobs Report Sends Stock Market Higher

Before the open, the Labor Department said U.S. employers added 850,000 jobs in June, as the labor market rebounded. Economists had forecast 703,000 new jobs, although the range of estimates was wide, from 520,000 to 1 million, amid uncertainty following a slowdown in hiring in the spring. The unemployment rate increased to 5.9% from 5.8% in May. The consensus forecast was 5.6%. Labor-force participation, which is the share of adults working or looking for work, was 61.6%, about 2% below the pre-pandemic level.

“Despite all the talk of labor shortages there does seem to have been a lot of hiring in June, particularly in the leisure and hospitality sector, where payrolls were up by 343,000,” Brian Coulton, Fitch Group chief economist, said in a report. Month-on-month growth in average hourly earnings slowed in June to 0.3%, but wage growth is picking up more noticeably on a three-month basis, he added.

Long-dated U.S. Treasury yields dropped on the jobs report. The yield on the benchmark 10-year note eased 3 basis points to 1.45%. The bond market is closing an hour early today, at 2 p.m. ET, and will remain closed on Monday for the Independence Day holiday. The stock market also is closed Monday.
Innovator IBD 50 ETF (FFTY) fell 0.7% and struggled to hold above its 50-day moving average.

Cerence (CRNC) led the IBD 50 with a 14% jump on news that the software company will be added to the S&P MidCap 400 index as of Wednesday. Cerence shares topped the 120.10 buy point of a cup-with-handle base in heavy trading.

Tech Titans Fueling Market Rally: These Three Are In Buy Range

Cricut, Smith & Wesson Cool Off

Crafts equipment maker Cricut (CRCT) and firearms maker Smith & Wesson Brands (SWBI) cooled off from their price runs. Cricut slid nearly 5% while Smith & Wesson fell more than 7%. Both remain near new highs.

Outside the IBD 50, electronic parts maker Amphenol (APH) topped the 69.72 buy point of a flat base in heavy volume. Gildan Activewear (GIL) was trying to break out past a 38.24 buy point.

Shares of Chinese ride-sharing company Didi Global (DIDI) fell about 6% in volatile trading after Chinese regulators said they are investigating the company’s cybersecurity risks, Dow Jones Newswires reported. Didi went public just Wednesday in an IPO that gave the ride-hailing company a $67 billion valuation. New user registrations are banned during the review, the regulator said.

Consumer staples, consumer discretionary, communications services and health care sectors also rose. Cyclical sectors, namely transportation, industrials and materials, joined financials and utilities in the downside. The energy sector was weakest, off 0.5% after OPEC and its allies postponed a meeting until Friday. A dispute emerged over raising production targets.

Juan Carlos Arancibia is the Markets Editor of IBD and oversees our market coverage. Follow him at @IBD_jarancibia

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