Modupe Gbadeyanka
By Investors Hub
Major U.S. index futures are pointing to a mixed opening on Monday, with the Dow futures up by down by 28 points and the Nasdaq futures up by 4.5 points.
Traders may be reluctant to make any significant moves ahead of Federal Reserve Chair Janet Yellen’s semiannual testimony before Congress.
Yellen is due to testify before the House Financial Services Committee on Wednesday and before the Senate Banking Committee on Thursday.
The comments from the Fed Chief could have a significant impact on the outlook for interest rates ahead of the central bank’s monetary policy meeting later this month.
After showing a significant move to the downside last Thursday, stocks regained some ground during trading on Friday. The Nasdaq and the S&P 500 rebounded after ending Thursday’s trading at their lowest closing levels in over a month.
The major averages finished the day firmly in positive territory. The Dow climbed 94.30 points or 0.4 percent to 21,414.34, the Nasdaq jumped 63.61 points or 0.1 percent to 6,153.08 and the S&P 500 advanced 15.43 points or 0.6 percent to 2,425.18.
For the holiday-interrupted week, the major averages moved modestly higher. While the Dow rose by 0.3 percent, the Nasdaq edged up by 0.2 percent and the S&P 500 inched up by 0.1 percent.
The rebound on Wall Street came following the release of a report from the Labor Department showing much stronger than expected job growth in the month of June.
The report said non-farm payroll employment jumped by 222,000 jobs in June following an upwardly revised increase of 152,000 jobs in May.
Economists had expected employment to climb by 179,000 jobs compared to the addition of 138,000 jobs originally reported for the previous month.
Despite the stronger than expected job growth, the unemployment rate inched up to 4.4 percent in June from 4.3 percent in May. Economists had expected the unemployment rate to hold steady.
The Labor Department also said average hourly employee earnings rose by 0.2 percent to $26.25. Average hourly earnings in June were up by 2.5 percent year-over-year.
“This was a strong jobs report, with a better-than-expected payroll rise augmented by a solid upward revision,” said Chris Low, chief economist at FTN Financial.
He added, “Still, it should not add to the already considerable fire under the FOMC because wage pressures are nowhere to be seen, and labor slack relaxed unexpectedly.”
The Federal Reserve is scheduled to make its next decision on interest rates following a two-day meeting later this month.
Traders also kept an eye on developments out of the G20 summit in Hamburg, Germany, where President Donald Trump held his first face-to-face meeting with Russian President Vladimir Putin.
Secretary of State Rex Tillerson told reporters Trump and Putin had a “very robust and lengthy exchange” about alleged Russian meddling in last year’s presidential election.
Tillerson said Trump and Putin also reached an agreement on a ceasefire in Syria, which he called the first indication the countries can work together to curb the violence in the war-torn country.
Airline stocks moved sharply higher over the course of the trading session, driving the NYSE Arca Airline Index up by 2.6 percent. With the jump, the index reached its best closing level in over fifteen years.
SkyWest (SKYW), Ryanair (RYAAY) and Alaska Air (ALK) turned in some of the sector’s best performances in late-day trading.
Considerable strength was also visible among semiconductor stocks, as reflected by the 1.7 gain posted by the Philadelphia Semiconductor Index. The index climbed further off the nearly two-month closing low set on Monday.
Networking also turned in a strong performance, resulting in a 1.4 percent advance by the NYSE Arca Networking Index. The gain by the index came after it ended the previous session at its lowest closing level in over a month.
Internet, housing, and software stocks also saw notable strength on the day, while gold stocks came under pressure amid a slump by the price of the precious metal.
