Rally Mode Continues
Stocks posted solid gains Friday following employment numbers that clearly
showed the cooling effects of the past year’s six Federal Reserve rate hikes. A
rise in the unemployment level sent stocks soaring at the open only to give back
some of those gains by the close. Despite the fade, the Nasdaq still booked a
0.7% gain, while the Dow and S&P 500 added 0.2% each for the day.
The August jobs report showed that the unemployment rate rose to 4.1%, which was higher than the unchanged 4.0% level analysts had expected. In addition, the
average hourly wage increased 0.3%, which was lower than the expected 0.4%, and
105,000 jobs were lost, which was surprising given the fact analysts expected
160,000 new jobs created.Â
Volume was light, with 1.46 billion shares trading on the Nasdaq and 771 million shares trading on the NYSE.
“The market is decidedly bullish, especially for
our favorite group names in technology. Volume was extremely high yesterday. It
was showing definite conviction by the institutional
crowd, and I suspect now we’re going to have some legs to the upside,” said
Gary Kaltbaum, Chief Technical Analyst, J.W. Genesis Securities.
“We are
a little overheated in the short term, so maybe we pull back, but I think the
market is setting up for good things going into September and October regardless
of the fact people are saying September is a bad month,” he added.
According to preliminary numbers, the Nasdaq gained 27.92 to 4234.27, the Dow
rose 23.68 to 11,238.78, and the S&P 500 lifted 3.09 to 1520.77.
Top sectors included retailers
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up 1.7%, broker/dealers
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up 1/1%.
On the weaker side were insurance
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down 1.0%, and airlines
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Broker/dealers on the rise included Legg Mason
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up 4.4%, and Raymond James
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Tech winners included PMC Sierra
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5/8, and Newport Corp.
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Dow winners were General Motors
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up 3.9%, and Coca-Cola
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down 1.2%, Philip Morris
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PowerRating), down
3.7%.
Looking ahead, the second quarter productivity report will be released next
Wednesday at 8:30 AM ET. Traders will be watching to see if it can match or beat
the first quarter’s impressive 5.3% increase.