Stock Market Update

[BRIEFING.COM] The stock market is in rally-mode, again. The major equity indices are poised to close their second-straight winning week on a high note despite a sizable earnings-related decline in Apple (AAPL 204.96, -8.35, -3.9%).

The Dow Jones Industrial Average (+1.5%), the S&P 500 (+1.6%), and the Nasdaq Composite (+1.8%) trade at or near session highs in a broad advance. Advancers lead decliners by a 5-to-1 margin at the NYSE and by a 3-to-1 margin at the Nasdaq. Amazon (AMZN 191.46, +1.24, +0.7%) had been trading lower initially in response to earnings, but the everything-rally has boosted shares into positive territory.

The positive bias is driven by momentum after a big run of late, along with optimism around the trade situation with China after an acknowledgement that China may be open to talks with the U.S.

Market participants are also feeling better about the economic situation after a solid jobs report. There was a 177,000 increase in nonfarm payrolls and the unemployment rate was steady at 4.2%.

There's also some technical factors in play after the S&P 500 closed above its 50-day moving average (5,582) yesterday. 

All 11 S&P 500 sectors are higher led by communication services (+2.5%) and financials (+2.1%). The consumer staples (+0.4%) and utilities (+0.5%) sectors show the slimmest gains.

Reviewing today's economic data:

• April Nonfarm Payrolls 177K (Briefing.com consensus 130K); Prior was revised to 185K from 228K, April Nonfarm Private Payrolls 167K (Briefing.com consensus 125K); Prior was revised to 170K from 209K, April Avg. Hourly Earnings 0.2% (Briefing.com consensus 0.3%); Prior 0.3%, April Unemployment Rate 4.2% (Briefing.com consensus 4.2%); Prior 4.2%, April Average Workweek 34.3 (Briefing.com consensus 34.2); Prior was revised to 34.3 from 34.2
  • The key takeaway from the report is that the employment situation in April remained relatively solid in spite of the volatility associated with the tariff actions and many castigations that they will hurt the economy. It is possible that will prove to be the case, but looking back at April, that wasn't the case in large part for the labor market.
• March Factory Orders 4.3% (Briefing.com consensus 4.1%); Prior was revised to 0.5% from 0.6%
  • The key takeaway from the report is that the headline number masks a languid situation for factory orders in March, which were negative when the transportation component is removed.