Updated 5:27 PM EDT by Rob Lenihan
Stocks finished higher Friday, with the Dow surging nearly 300 points, even though a crucial jobs report fell short of expectations.
The Dow Jones Industrial Average gained 288.73, or 0.69%, to finish the session at 42,052.19, while the S&P 500 rose 0.41% to close at 5,728.80 and the tech-heavy Nasdaq advanced 0.80% to end the dat at 18,239.92.
Shares Amazon and Intel after the tech companies reported better-than-expected quarterly earnings.
The economy added only 12,000 new jobs last month, the Labor Department reported, as a strike at Boeing (BA) and storms in Florida and the southeast added to a what is already a cooling labor market
Jeffrey Roach, chief economist for LPL Financial, said that bond yields "plummeted immediately following the employment report as investors believe the macro environment is weakening."
"Given the storm-related distortion, the Fed is in a tight spot as they adhere to data-dependency.” he said. "Further complicating things for policy makers are the recent data revisions to income, spending, and savings rates."
"That said, the Fed will likely cut rates in the remaining two meetings as economic conditions weakened," Roach added.
Updated 11:16 AM EDT
Bonds MOVE
Benchmark 10-year Treasury note yields extended their autumn surge into November, rising another 5 basis points from overnight levels to 4.345%, the highest since early July, following on from the biggest bond market selloff in two years last month.
Shorter-term yields are also on the move, with 2-year notes rising to 4.164% as investors picked through this week's mixed jobs, inflation and consumer spending data.
The Merrill Lynch Option Volatility Estimate, better-known as the MOVE index and a key gauge of bond market volatility, was last marked at 135.18, a 36% increase over the past 3 months and the highest levels since May of 2023.
Average Hourly Earnings in the US increased 4% over the last year, still well above the historical average of 3.1%. The CPI Inflation Rate is expected to be 2.6% YoY in October, meaning a 1.4% positive spread between wage growth and price increases.https://t.co/l5IYmkeySJ pic.twitter.com/dycjUn03yg
— Charlie Bilello (@charliebilello) November 1, 2024
Updated 9:36 AM EDT
Cold November gain
The S&P 500 added 28 points, or 0.53% to kick-off trading for the month of November, with the Nasdaq rising 108 points, or 0.6%.
The Dow rose 236 points, boosted in part by Amazon, to trade just south of the 42,000 point mark while the mid-cap Russell 2000 rose 16 points 0.73%.
"We’re in the midst of a hectic stretch with economic data, earnings, the Fed, and the US election," said Bret Kenwell, U.S investment analyst at eToro. "There’s been some additional — and understandable — volatility around these events, but so far nothing has changed the big-picture view."
"The US appears to be on solid footing with the jobs market, the economy, and earnings — all three of which are instrumental to the stock market," he added. "Until that changes, the long-term drivers of the bull market remain intact."
S&P 500 Opening Bell Heatmap (Nov. 01, 2024)$SPY +0.48%🟩$QQQ +0.45%🟩$DJI +0.41%🟩$IWM +0.71%🟩 pic.twitter.com/lAnO5fDf1c
— Wall St Engine (@wallstengine) November 1, 2024
Updated 9:11 AM EDT
Amazon boost
Amazon shares are set to open with a market value well above $2 trillion Friday following a solid set of third quarter earnings for the retail and tech giant, which sits in all three major U.S. stock benchmarks, that justified its massive capital spending in AI technologies.
Generative AI is a really unusually large, maybe once-in-a-lifetime type of opportunity," CEO Andy Jassy told investors last night. "And I think our customers, the business, and our shareholders will feel good about this long term that we're aggressively pursuing it."
Amazon shares were marked 6.9% higher in premarket trading to indicate an opening bell price of $199.25 each, just shy of its intra-day record high of $201.20.
Related: Goldman Sachs analyst updates Amazon stock price target after earnings
Updated 8:43 AM EDT
Cooling jobs
The economy added only 12,000 new jobs last month, the Labor Department reported, as a strike at Boeing BA and storms in Florida and the southeast added to a what is already a cooling labor market.
Average hourly earnings in October rose 0.4% from prior-month levels and were up 4% on an annual basis, with both tallies matching Wall Street forecasts. The headline unemployment rate, however, held at 4.1%
U.S. stock futures pared earlier gains following the data release, with the S&P 500 now called 25 points higher and the Nasdaq priced for a 115 point advance and the Dow for a 155 point gain.
Benchmark 10-year Treasury note yields fell 7 basis points to 4.241% following the data release while rate-sensitive 2-year notes fell 13 basis points to 4.081%.
BLS: "It is likely that payroll employment estimates in some industries were affected by the hurricanes...not possible to quantify the net effect on...change in national employment...because the establishment survey is not designed to isolate effects from extreme weather events." pic.twitter.com/i47BDeObxh
— talmon joseph smith (@talmonsmith) November 1, 2024
Updated 7:59 AM EDT
Slick profits
Chevron (CVX) and Exxon Mobil (XOM) both posted stronger-than-expected third quarter earnings as the two oil majors benefited from higher global prices and production increases.
Chevron's profits fell by around 20% compared to last year, but at $4.53 billion still topped Street forecasts, while Exxon benefited from what CEO Darren Woods called "record levels of demand" to generate a bottom line of $8.6 billion.
Exxon shares were marked 2% higher at $119.15 in premarket while Chevron gained 2.1% to indicate an opening bell price of $151.90 each.
MARKET RECON: Red October $XLF $XLV $MSFT $META $XLU $XLK $AMZN $INTC $BA $AAPL $XOM $CVX $SPX $COMPQ $SOX $RUT #MarketRecon https://t.co/DmhMWWmOYG via @sarge986
— Stephen Guilfoyle (@Sarge986) November 1, 2024
Stock Market Today
Stocks ended lower on Thursday, extending an October decline that snapped a five-month winning streak for the major benchmarks defined by the biggest selloff in U.S. Treasurys for at least two years.
A slate of disappointing earnings from Magnificent 7 tech giants added to the market's angst, although a solid update last night from Amazon (AMZN) could offset a muted iPhone 16 sales outlook from Apple (AAPL) heading into the start of Friday trading.
However, with a key October payroll looming, and next week's headline risks - including a deadlocked election race between Vice President Kamala Harris and former President Donald Trump - looming, market-volatility gauges are showing Wall Street fear levels at multimonth highs.
CBOE Group's VIX index was marked 11.1% higher in after-hours trading at $22.61, a level that suggests daily swings for the S&P 500 of around 1.4%, or 80 points, over the next month.
The MOVE index, a similar gauge for the bond market, was pegged at its highest levels of the year as benchmark 10-year Treasury yields tested a key level of 4.3% heading into today's October jobs report.
Analysts expect the Labor Department to show that around 106,000 new jobs were created last month, less than half the 254,000 recorded in September thanks in part to the twin hurricanes that hammered Florida and the southeast last month.
Global oil prices were also on the move, rising nearly $2 per barrel and lifting WTI crude futures well past the $70 mark, following reports that suggest Iran is preparing a military strike on Israel as the region's military tensions escalate.
Brent crude contracts for January delivery, the global pricing benchmark, were last seen $1.88 higher at $74.70 per barrel.
Heading into the start of the trading day on Wall Street, futures contracts tied to the S&P 500, which ended October with a 0.99% decline, are priced for a modest 16 point opening bell gain.
The tech-focused Nasdaq, which fell 0.52% last month is priced for a 75 point bump while the Dow Jones Industrial Average is called 80 points higher.
Amazon shares, which sit in all three major benchmarks, were one of the most active names in the premarket, rising 6.2% to $197.75 after a better-than-expected third-quarter earnings report that included a solid outlook for retail sales.
Related: Apple stock slides as muted iPhone 16 outlook clouds earnings beat
Apple, meanwhile, fell around 1% to $223.73 after its better-than-expected fiscal-fourth-quarter earnings were clouded in part by a muted revenue forecast and questions about the pace of demand for the new iPhone 16.
Intel (INTC) shares were marked 5.6% higher at $22.75 after the troubled chipmaker posted the largest net loss in company history, tied in part to accounting changes, but forecast solid gains for its PC and server business over the coming months.
More Wall Street Analysts:
- Analysts update Meta stock price target with Q3 earnings in focus
- Analysts update outlook for Nvidia's Blackwell chips amid AI boom
- Analyst reboots Reddit stock price target ahead of earnings
In overseas markets, Europe's Stoxx 600 was marked 0.47% higher in early Frankfurt trading, with Britain's FTSE 100 up 0.48% in London.
Overnight in Asia, hawkish rate comments from the Bank of Japan lead to a firmer yen, which held down export stocks and pulled the Nikkei 225 into a 2.6% loss for the session.
The regional MSCI ex-Japan benchmark, meanwhile, got a boost from China-based stocks to rise 0.17% into the close of trading.
Related: Veteran fund manager sees world of pain coming for stocks
