U.S. stocks traded higher Monday, with the Dow Jones Industrial Average rallying more than 100 points, as investors looked to Friday's release of the pivotal jobs report for April. Much of the focus this week will be on the U.S. nonfarm payroll numbers. The release follows a March report that showed a sharp slowdown in hiring.
In morning trading, the Dow Jones Industrial Average (INDEXDJX:.DJI) climbed 107.74 points, or 0.5 percent, to 18,133.76. The Standard & Poor's 500 (INDEXNASDAQ:.IXIC) added 9.72 points, or 0.46 percent, to 2,118.01. The Nasdaq composite (INDEXSP:.INX) rose 28.42 points, or 0.57 percent, to 5,033.81.
This is an important week for the financial markets because of the market-moving nature of the U.S. employment report. The U.S. economy added far fewer jobs in March, marking the weakest pace of job growth since 2013. The U.S. had previously added at least 200,000 jobs per month for 12 consecutive months, a feat not seen in 20 years.
As a result of the disappointing data, market analysts pushed out expectations that the U.S. Federal Reserve would raise interest rates in June.
Four main areas damped job creation in March, explains Mark Hamrick, Washington bureau chief at Bankrate.com: harsh winter weather, a strong U.S. dollar, lingering effects from the labor dispute at West Coast ports and lower energy and commodity prices.
A strong dollar is beginning to show signs of negative effects on U.S. employment, as job creation in March saw a sharp decline in manufacturing as imports rose and exports slowed. Meanwhile, the U.S. economy grew slower than expected in the first three months of 2015.
A weak April jobs report, coupled with the disappointing first-quarter gross domestic product report, would suggest the Fed will likely wait to raise rates until after its June meeting. The central bank met last week and kept interest rates at historic lows.
The report due Friday is expected to show that employers added 213,000 jobs in April, up from 126,000 in March, according to analysts polled by Thomson Reuters. The unemployment rate is expected to tick down to 5.4 percent from 5.5 percent in March. Average hourly earnings are forecast to increase 0.2 percent, and hours worked are expected to hold steady at 34.5 per week.
Separately, notable companies reporting quarterly earnings this week include e-commerce giant Alibaba Group Holding Ltd., electric car manufacturer Tesla Motors Inc., media and technology company Comcast Corporation and retailer Office Depot Inc.
Here's the latest economic calendar for the week of May 4. All listed times are EDT.
- 10 a.m. -- Factory orders (March)
- 8:30 a.m. -- Trade deficit (March)
- 10 a.m. -- ISM nonmanufacturing (April)
- 8:15 a.m. -- ADP employment (April)
- 8:30 a.m. -- Productivity (Q1)
- 8:30 a.m. -- Unit labor costs (Q1)
- 8:30 a.m. -- Weekly jobless claims
- 3 p.m. -- Consumer credit (March)
- 8:30 a.m. -- Nonfarm payrolls (April)
- 8:30 a.m. -- Unemployment rate (April)
- 10 a.m. -- Wholesale inventories (March)