In closing the best week for the stock market in 2023, stocks gained on Friday following a weak jobs report that lowered bond yields.
222 points, or 0.6%, were added to the Dow Jones Industrial Average. The Nasdaq Composite increased 1.4%, while the S&P 500 gained almost 1%.
Investment optimism that the Federal Reserve’s rate-hiking cycle is coming to an end helped stocks record significant weekly gains. For the first time since October 2022, the Dow was up over 5% in that week. Having gained for the first five days since June, the S&P 500 is now up more than 5%. Over 6% of value was added to the Nasdaq.
The October jobs data, which was released on Friday, proved that the Federal Reserve’s efforts to curb inflation and cool the economy may be having some effect. The United States economy added 150,000 jobs last month, which was less than the 170,000 payrolls gain consensus projection from Dow Jones and less than the stunning 297,000 job additions in September. Contrary to predictions that it would remain stable at 3.8%, the jobless rate increased to 3.9%.
In October, average hourly wages increased by 0.2% instead of the expected 0.3%, which was a monthly decline from forecasts.
The poorer-than-expected payroll data and smaller average hourly wages gain on Friday sent bond yields, which have been a drag on the stock market for the past three months, plunging. From its peak of 5% last month, the yield on the 10-year Treasury fell by more than 9 basis points to 4.57%. To 4.8%, the yield on the 2-year Treasury note dropped 13 basis points.
Source (CNBC)
