RTTNews - Stocks are continuing to post significant gains in mid-afternoon trading on Friday, fueled by a promising jobs report. The major averages are all in positive territory by substantial margins after ending the two previous sessions in the red.
This morning, the Labor Department issued a report showing that the pace of job losses slowed by even more than economists had been anticipating in the month of July. The unemployment rate also dipped unexpectedly.
In an interview with RTT News, Jim Awad, managing director of Zephyr Management discussed the market's rally on the heels of a better than expected July employment report, which he said, adds credibility to the case that we are on the cusp of turning in the economy.
Awad added, It's a positive piece of the puzzle. For those of us that have been skeptical.it's a humbling experience.The economy appears to be turning the corner.
On the earnings front, American International Group (AIG) and Fannie Mae (FNM) saw mixed reaction to their quarterly results as the firms are lingering in the shadow of receiving government bailout funds last fall.
Meanwhile, Hansen Natural Corp. (HANS), Nvidia (NVDA) and AES Corp. (AES) largely beat estimates. Generally, companies have been able to surpass expectations on the bottom line via cost cutting, as revenue growth was limited by the recent economic conditions.
The major averages have moved sideways in recent trading, hovering near their best levels of the day. The Dow is currently up 162.79 at 9,419.05, the Nasdaq is up 34.94 at 2,008.10 and the S&P 500 is up 18.52 at 1,015.60.
All of the Dow components are in positive territory, contributing to the substantial gain being shown by the blue chip index in mid-afternoon trading.
One of the leading performers in the Dow is banking giant JP Morgan Chase (JPM), which is posting a gain of 5.4 percent. The gain has propelled the stock to its best intraday price in nearly ten months.
Shares of American Express (AXP) and Disney (DIS) are also rising, with both of the stocks advancing by more than 5 percent each. American Express reached its best price in ten months at its peak for the session, while Disney is moving towards the higher end of a recent trading range.
General Electric (GE) and Boeing (BA) are moving sharply higher, posting gains of 3.3 percent and 2.9 percent, respectively. While GE reached a seven-month intraday high earlier, Boeing moved to its best intraday price in over six weeks.
While Merck (MRK), Home Depot (HD) and Travelers (TRV) are also seeing strong gains, while Coca-Cola (KO) and Intel (INTC) are underperforming.
Commercial real estate stocks are seeing significant gains, driving the Morgan Stanley REIT Index up by 6.4 percent. With the gain, the real estate index is looking to close at its highest level in nine months.
The index is being bolstered by shares of CBL & Associates Properties (CBL), Pennsylvania Real Estate Investment Trust (PEI) and Parkway Properties (PKY), all of which have surged up by more than fifteen percent, setting fresh multi-month highs.
Housing and railroad stocks are also advancing by notable margins, with the Philadelphia Housing Sector Index and the Dow Jones Railroads Index up 5.4 percent and 5.3 percent, respectively. The housing index is looking to close at its highest level in ten months, while the railroads index has risen to its best intraday level in nearly nine months.
While banking, transportation and retail stocks are also moving higher, gold stocks continue to defy the day's uptrend. The decline by gold stocks has come as the price of the commodity has retreated on the NYMEX, falling by $3.40 to $959.50 an ounce.
In Focus: Monthly Jobs Data, Earnings News
As mentioned above, the Labor Department report showed that non-farm payroll employment fell by 247,000 jobs in July following a revised decrease of 443,000 jobs in June. Economists had been expecting employment to fall by 325,000 jobs compared to the drop of 467,000 jobs originally reported for the previous month.
Additionally, the report said that the unemployment rate unexpectedly edged down to 9.4 percent in July from 9.5 percent in June. With the decrease, the unemployment rate fell for the first time since April of 2008.
In earnings news, American International Group reported second-quarter adjusted net income of $2.57 per share, compared to a loss of $10.15 per share in the year ago quarter. Wall Street analysts expected the embattled insurer to earn $1.33 per share for the quarter. The profit was the first for the firm in seven quarters.
Meanwhile, Fannie Mae, the government-sponsored home mortgage finance company, reported a heavy loss for the second quarter on higher credit related expenses, impairments and fair value losses. Further, the company said it has applied for an additional $10.7 billion in aid from the federal government and is dependent on the continued support of the Treasury for operating its business.
In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance on Friday. Japan's benchmark Nikkei 225 Index rose by 0.2 percent, while Hong Kong's Hang Seng Index slipped by a substantial margin, posting a loss of 2.5 percent.
Meanwhile, the major European markets closed notably higher, with the French CAC 40 Index and the German DAX Index posting gains of 1.3 percent and 1.7 percent, respectively, while the U.K.'s FTSE 100 Index rose by 0.9 percent.
In the bond markets, treasuries are continuing to show notable weakness. Subsequently, the yield on the benchmark ten-year note is trading at 3.858 percent, posting a gain of 11.2 basis points.
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