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U.S. stocks mixed, as strong jobs report provides support for rate hike

Published 11/06/2015, 03:58 PM
Updated 11/06/2015, 04:22 PM
The Dow and NASDAQ inched up on Friday, while the S&P 500 closed slightly lower

The Dow and NASDAQ inched up on Friday, while the S&P 500 closed slightly lower

Investing.com -- U.S. stocks were mixed on a volatile, choppy day of trading after the release of arguably the strongest monthly national employment report on the year bolstered the case for a December interest rate hike from the Federal Reserve.

On Friday morning, the U.S. Department of Labor said in its October national employment report that nonfarm payrolls surged by 271,000 last month, the largest increase since last December. The unemployment rate dipped by 0.1% to 5.0%, while average wages soared by 0.4%, sharply above consensus estimates of a 0.2% gain. Over the last 12 months, hourly wages have spiked by 2.5%, their strongest annual increase in more than six years.

A rate hike, though, is largely viewed as bearish for U.S. equities as investors pile into the dollar and fixed investments to capitalize on higher yields.

The Dow Jones Industrial Average fell by as much as 70 points shortly after the release before rallying several times throughout the session to close in the green. At the close of trading on Friday, the Dow stood at 17,910.33, up 46.90 or 0.26% on the day. The Dow closed higher for the fifth consecutive week. The NASDAQ Composite Index also extended its streak of weekly gains to five after edging up 19.38 or 0.38% to close at 17,910.33.

The S&P 500 Composite Index, meanwhile, fell 0.73 or 0.03% to 2,099.20, as six of 10 sectors closed in the red. Stocks in the Financials and Technology sector led, while stocks in the Utilities industry lagged, plunging more than 3.7% on the session. Utilities lose their attractiveness in higher rate environments, as rising debt level could impact their creditworthiness. Stocks in Duke Energy Corporation (N:DUK), CenterPoint Energy Inc (N:CNP) and Public Service Enterprise Group (N:PEG) all fell by more than 5% on the day.

Financial stocks dominated the Dow, as Goldman Sachs Group Inc (N:GS) and JPMorgan Chase & Co (N:JPM) finished as the top two performers of the session. Goldman Sachs gained 7.29 or 3.80% to 199.31, while JP Morgan added 2.03 or 3.05% to close at 68.47. Annual gains in both major banks still remain in the single digits for the year. The worst performer was UnitedHealth Group Incorporated (N:UNH), which lost 1.71 or 1.47% to close at 114.52. United Health, one of the largest health insurers in the U.S., closed as the worst performer on the Dow twice this week.

The biggest gainer on the NASDAQ was NVIDIA Corporation (O:NVDA), which soared 3.88 or 14% to 31.59, after the Silicon Valley manufacturer of 3-D graphics processors crushed revenue and earnings expectations for its third quarter. Earlier on Friday, Nividia shares surged as high as 31.93 to reach a 52-week high. The worst performer was Delaware-based pharmaceutical company Incyte Corporation (O:INCY), which plummeted 15.71 or 13.45% to 101.05, after worse than expected results of a selective study on Epacadosat, its IDO1 inhibitor.

Nividia also finished as the top performer on the S&P 500, just ahead of Monster Beverage 1990 Corp (O:MNST) which jumped 17.96 or 13.58% to 150.20, amid stronger than expected earnings attributed to its partnership with an international Coca-Cola bottler. The worst performer was TripAdvisor Inc (O:TRIP), which saw its quarterly earnings slump last quarter due in part to slower than expected display and click-based advertising growth. Shares in Trip Advisor fell 5.49 or 6.61% to 77.62.

On the New York Stock Exchange, advancing issues outnumbered declining ones by a 1,938-1,184 margin.

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