According to the news report by MarketWatch, while the stock market may have started the month of February on a rather muted note, it closed mostly higher thanks to a very strong US jobs report. This offset the rather weak forecast that e-commerce giant Amazon.com Inc. gave for the quarter.
The Dow Jones Industrial Average went up by 64.22 points, or 0.3%, to close the trading day on Friday at 25,063.89. The index was up 1.3% for the week, extending its winning streak for the 6th week in a row. This is the longest streak the index has had since November of 2017. At that time, the blue-chip index saw gains for 8 consecutive weeks.
The S&P 500 closed the day’s trading at 2,706.53 points. The index was up by 1.6% this week.
The Nasdaq was the only one of the 3 to lose ground for the day. It fell by 17.87 points on Friday, which was a 0.3% loss, and closed the trading day at 7,263.87 points. However, despite its losses on Friday, overall for the week the technology heavy index closed the week 1.4% higher.
The biggest push the markets got this last week was from the US jobs report, which showed that 304,000 new jobs had been created in the country. This figure was much higher than the market consensus estimates of about 172,000 jobs.
However, job growth for the month of December had fallen by 90,000, which diluted the impact of the number of new jobs created in that time.
The figures also revealed that the government shutdown has not had as great an impact on the US economy as feared, though the employment rates went up to 4% from the previous 3.9%. This was partially due to the fact that most federal employees did not receive their paychecks for most of January.
According to the jobs report, the average per-hour wage earnings went up marginally by 0.1%, which was lower than the 0.2% market consensus expectation. This figure reflects that more dovish attitude that the Federal Reserve adopted earlier this week.
The 12-month average of per-hour average wage increases rate dropped to 3.2% from a previously revised 3.3% for the last 3 months.
Other data also showed that the US economy was still strong.
The ISM Manufacturing index’s final data reading for the month of January was 56.6%. This figure was higher than the initial reading of 54.1% and also higher than the analyst expectation of 54.3%.
Added to that, the final American manufacturing purchase managers index, IHS Markit’s reading was 54.9 for the month of January. This was up from 53.8 in December, however, was at par with market analyst expectations.
The University of Michigan’s consumer sentiment reading for the month of January was raised from an initial 90.7 to 91.2. This was the worst final reading for consumer sentiment since Donald Trump was elected as President of the United States.
Spending on construction went up in November, a 0.8% gain since October, to $1.2 trillion (after adjusting for the season). The US Commerce Department stated that this report had been delayed because of the government shutdown. The Commerce Department also reported that wholesale inventories went up by 0.3% for the month of November as compared to the month before.
According to Aberdeen Standard Investments senior investment manager James Athey, the strong jobs report was not going to have such a huge impact on the stock market. He said that this was the one piece of data that had consistently strong for the last 8 years.