Data on the US labor market stimulate the growth of the US stock market
American stock indices rise on Friday after the publication of data on the US labor market for August, which showed a slowdown in job growth and an increase in unemployment.
By 17:10 Moscow time, the Dow Jones Industrial Average rose by 141.53 points (0.45%) and amounted to 31,797.95 points. Standard & Poor’s 500 rose 21.45 points (0.54%) to 3988.3 points. The Nasdaq Composite added 42.95 points (0.36%) to 11,828.08 points.
Share price of Broadcom Inc. rose 3.5% during trading on Friday. One of the world’s largest manufacturers of semiconductor components increased its net profit in the third financial quarter by 1.7 times. Broadcom’s adjusted earnings and revenue beat market forecasts last quarter.
Papers Ford Motor Co (NYSE:F). add 0.2% to the price. Sales of Ford in the US in August rose by 27.3% compared to the same month of the previous year, to 158,088 vehicles. The rate of increase in sales, however, slowed down from 36.6% in July and 31.5% in June. Sales of Ford electric vehicles quadrupled last month to 5.9 thousand units.
Shares of Lululemon Athletic Inc. rose by 10.5%. The sportswear maker posted stronger-than-expected earnings and revenue in its fiscal 2nd quarter. His forecasts for the entire fiscal year also exceeded market expectations.
The price of Bed Bath & Beyond Inc. (NASDAQ:BBBY), which owns a chain of home improvement stores, fell 3.8% after falling 8.6% in the previous session. Raymond James downgraded its stock recommendation the day before, noting that “underlying business trends” for the company “remain sad.” Earlier this week, Bed Bath & Beyond announced plans to close some 150 stores, cut jobs and raise new funding to stabilize the business and replenish cash reserves.
Shares of chemical company Dow Inc. add 0.3% in price, despite the worsening of the recommendation for shares by JPMorgan analyst Jeffrey Zekauskas. The expert, who had an overweight recommendation for the Dow stock since December 2020, downgraded it to neutral. He also lowered the company’s target price by 22% to $47 from $60, noting that the Dow’s outlook is deteriorating due to falling chemical prices.
Data from the labor market was taken as a signal that the tightening of monetary policy by the Federal Reserve System (Fed) is beginning to bear fruit, notes Market Watch.
The number of jobs in the US economy in August increased by 315 thousand after rising by 526 thousand in July, according to data from the Department of Labor. Unemployment hit a six-month high last month at 3.7% compared to 3.5% in July. This came as a surprise to analysts who had not anticipated a change.
The published data showed that the US labor market remains strong, easing investors’ fears that the economy is sliding into recession as a result of the Fed’s rapid tightening of policy. At the same time, wage growth has slowed, which is a signal of weakening inflation, said Mona Mahajan, chief investment strategist at Edward Jones.
The average hourly wage in the private sector in August increased by 0.3% compared to the previous month – up to $32.36. In July, the indicator increased by 0.5%.
“We continue to feel that inflation is moving in the right direction,” said Mahajan, quoted by Dow Jones.