Stocks Hold at Session Highs as Wall Street Looks to September Jobs Report

Stocks held at session highs by mid-afternoon Thursday, Oct. 5. Benchmark indexes were trading above record levels set a day earlier in a bid to extend a winning streak that has stretched over several sessions.
The Dow Jones Industrial Average rose 0.46%, or 100 points. The blue-chip index was on track for its seventh straight day in the green. The S&P 500 increased 0.54%, and the Nasdaq gained 0.62%. All three notched new intraday records on Thursday.
The benchmark indexes ended the session on Wednesday, Oct. 4, at record highs, albeit with just small gains. Wednesday marked the third straight record close in a row for the Dow, the Nasdaq’s fourth, and the S&P 500’s fifth. The S&P 500 was on track for its longest win streak in two decades.
The string of recent hurricanes could affect the official U.S. jobs report, which will be released on Friday, Oct. 6. Economists surveyed by FactSet anticipate 80,000 jobs to have been added to the U.S. economy in September, a sharp slowdown from the 156,000 jobs added in August. The measure has not fallen below the 100,000 mark since March and has only been below that threshold four times in the past five years.
“This number more than any number this year might be one to discount and not pay too much attention,” U.S. Bank Wealth Management’s Jeff Kravetz told TheStreet. “It’s not going to be a very good number because of all the hurricane-related issues… We’re not really paying that much attention to that just because it’s just one point in a really long data series.”
Weekly jobless claims in the U.S. saw a sharp decline in the past week, according to the Labor Department. The number of new claims for unemployment benefits fell by 12,000 to 260,000. The less volatile four-week claims average dropped 9,500 to 268,250.
Claims in recent weeks have shown the initial impact of hurricanes Harvey, Irma and Maria. The number of new applications for unemployment benefits had seen an uptick.
The U.S. trade deficit dropped in August to its lowest level in 11 months, falling by 2.7% to $42.4 billion. Imports slipped 0.1% to $237.7 billion, while exports increased by 0.4% to $195.3 billion.
Factory orders rose in August, partially offsetting a steep decline in July. New orders for manufactured goods increased 1.2%, according to the Census Bureau. The measure has risen in two of the past three months. Shipments rose 0.5%, climbing for their eighth time in the last ninth months.
Fiscal changes from Capitol Hill are needed to improve the rate of growth in the U.S., Philadelphia Fed President Patrick Harker told CNBC on Thursday. GDP will remain “slightly above 2%” until further details of the Republicans’ tax plans come to light. However, Harker still sees another interest rate hike before the year is out.
Also in Fedspeak on Thursday, San Francisco Fed President John Williams delivers the keynote address at the Community Banking in the 21st Century Conference in St. Louis, Harker will participate in a Q&A, and Kansas City Fed President Esther George will speak at an Austin, Texas, conference.
Consumer staples stocks carried the bulk of Wall Street again on Thursday, extending a trend that has characterized trading so far this week. Constellation Brands Inc. (STZ)  contributed a large portion of the sector’s gains. The stock jumped 4% after the alcohol company topped second-quarter earnings estimates. Net income rose to $2.48 a share from $1.75 a year earlier. Adjusted earnings of $2.47 a share, higher than an estimated $2.17 a share. Net sales of $2.08 billion also came in higher than anticipated. Strong beer sales offset weaker wine and spirits sales.
L Brands Inc. (LB)  added 2% after reporting improving same-store sales trends. Same-store sales fell by 2% in September, half the rate of decline in August. Overall sales at the Victoria’s Secret parent increased 1.1% to $981.6 million. L Brands said the recent hurricanes hurt sales by a full percentage point and that its exit of the swim and apparel categories hit same-store sales by three percentage points.
SeaWorld Entertainment Inc. (SEAS)  tumbled 4% following reports Legoland and London Eye owner Merlin Entertainments PLC was pursuing an offer. The U.K.-based company is reportedly pursuing a deal in order to expand its overseas holdings.
Netflix Inc. (NFLX) climbed more than 4% after announcing plans to increase its subscription prices. The streaming service’s HD plan, formerly $10 a month, will now cost $11. Its 4K streaming plan, formerly $12 a month, will now cost $14. Netflix said the increases will “roll out to members over the course of the next several months.” New U.S. members will be charged the higher price at the time of sign-up.
Micro-cap stock Onvia Inc. (ONVI) was the best performer on the Nasdaq after agreeing to be acquired by Deltek Inc. The enterprise software company offered Onvia $9 a share in an all-cash deal. The offer represents a 100% premium to Onvia’s last closing price of $4.55. The overall deal is worth around $70 million.
FedEx Corp. (FDX) and United Parcel Service Inc. (UPS) were lower on Thursday on reports Amazon.com Inc. (AMZN) was testing out free two-day delivery for more products. Amazon’s service is still in a trial run on the West Coast and will likely roll out in other markets next year, according to Bloomberg.
Crude oil prices returned to trade above $50 a barrel on Thursday. The commodity declined on Wednesday even after inventories declined in the past week at a far steeper pace than anticipated. Operational refineries have continued to work through the buildup in stocks caused by Hurricane Harvey. A number of refineries in the region were shuttered in the immediate aftermath in early September, causing crude stockpiles to spike.
West Texas Intermediate crude was up 1.5% to $50.72 a barrel on Thursday.

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