U.S. Stocks Mostly Positive After Early Volatility

Stocks have shown wild swings over the course of morning trading on Friday, as traders digest the Labor Department’s closely watched monthly jobs report.

After an early move to the upside, the major averages pulled back sharply only to show a notable rebound shortly afterward.

Currently, the major averages are all in positive territory. The Dow is up 204.39 points or 0.6 percent at 35,420.28, the Nasdaq is up 69.24 points or 0.5 percent at 14,028.95 and the S&P 500 is up 20.79 points or 0.5 percent at 4,522.68.

The volatility on Wall Street comes after the Labor Department released a report showing employment in the U.S. increased by less than expected in the month of July.

The report said non-farm payroll employment climbed by 187,000 jobs in July after rising by a downwardly revised by 185,000 jobs in June.

Economists had expected employment to jump by 200,000 jobs compared to the addition of 209,000 jobs originally reported for the previous month.

Meanwhile, the Labor Department said the unemployment rate edged down to 3.5 percent in July from 3.6 percent in June. Economists had expected the unemployment rate to remain unchanged.

The Labor Department also said average hourly employee earnings increased by $0.14 or 0.4 percent to $33.74 in July.

Annual wage growth came in at 4.4 percent in July, unchanged from June. Economists had expected the pace of growth to slow to 4.2 percent.

Following the mixed report, most economists still expect another pause in interest rate hikes by the Federal Reserve next month, although the data has led to some uncertainty about the outlook for rates beyond that.

“With the labor market very strong, wages rising solidly, and core inflation well above the Fed’s target, odds are better than 50-50 that the Fed makes another quarter percentage point rate hike in the second half of 2023, most likely at the Fed’s November 1 decision,” said Bill Adams, Chief Economist for Comerica Bank.

He added, “That would have the Fed skipping a rate hike at the next decision in September, like they did in June, in recognition that interest rates are probably near the peak for this cycle.”

Among individual stocks, shares of Amazon (AMZN) are moving sharply higher after the online retail giant reported better than expected second quarter and provided upbeat revenue guidance for the current quarter.

On the other hand, shares of Apple (AAPL) are seeing notable weakness after the tech giant reported fiscal third quarter earnings that beat analyst estimates but a continued decrease in revenues.

Sector News

Telecom stocks have moved sharply higher in morning trading, resulting in an 8.5 percent spike by the NYSE Arca North American Telecom Index. The index has jumped to its best intraday level in a month.

Telephone and Data Systems (TDS) and United States Cellular (USM) have both skyrocketed after each decided to initiate a process to explore strategic alternatives for UScellular.

Retail stocks are also seeing substantial strength following Amazon’s upbeat results, driving the Dow Jones U.S. Retail Index up by 3.8 percent to its best intraday level in over a year.

Oil, gold and chemical stocks are also seeing considerable strength on the day, while tobacco stocks have shown a notable move to the upside.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Friday. Japan’s Nikkei 225 Index inched up by 0.1 percent, while Hong Kong’s Hang Seng Index climbed by 0.6 percent.

The major European markets have also moved to the upside on the day. While the French CAC 40 Index has risen by 0.6 percent, the U.K.’s FTSE 100 Index is up by 0.2 percent and the German DAX Index is up by 0.1 percent.

In the bond market, treasuries have shown a significant rebound after moving sharply lower in recent sessions. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 9.1 basis points at 4.098 percent.

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