Dipo Olowookere
By Investors Hub
The major U.S. index futures are pointing to a higher opening on Friday following the release of the Labor Department’s closely watched monthly jobs report. The upward momentum comes even though the report showed much weaker than expected job growth.
Analysts have said the smaller than expected increase in employment is not likely to derail an interest rate hike by the Federal Reserve later this month.
Stocks moved mostly higher over the course of the trading session on Thursday, offsetting the weakness seen in the two previous sessions. With the advance on the day, the three major averages reached new record closing highs.
The major averages ended the session at their best levels of the day. The Dow rose 135.53 points or 0.7 percent to 21,144.18, the Nasdaq advanced 48.31 points or 0.8 percent to 6,246.83 and the S&P 500 climbed 18.26 points or 0.8 percent to 2,430.06.
The strength on Wall Street came following the release of some upbeat economic data, including a report from payroll processor ADP showing a jump in private sector employment in the month of May.
ADP said private sector employment jumped by 253,000 jobs in May after climbing by a revised 174,000 jobs in April.
Economists had expected an increase of about 185,000 jobs compared to the addition of 177,000 jobs originally reported for the previous month.
The Institute for Supply Management also released a report showing activity in the manufacturing sector unexpectedly grew at a slightly faster rate in the month of May.
The ISM said its purchasing managers index inched up to 54.9 in May from 54.8 in April, with a reading above 50 indicating growth in the manufacturing sector. Economists had expected the index to edge down to 54.5.
Meanwhile, a separate report from the Labor Department showed that first-time claims for U.S. unemployment benefits rose by more than expected in the week ended May 27th.
The report said initial jobless claims climbed to 248,000, an increase of 13,000 from the previous week’s revised level of 235,000. Economists had expected jobless claims to edge up to 239,000.
The Commerce Department also released a report showing that construction spending unexpectedly tumbled by 1.4 percent in April.
Late in the session, President Donald Trump announced his widely anticipated decision to withdraw from the landmark Paris climate accord that seeks to reduce carbon emissions and slow the effects of climate change.
Networking stocks showed a strong move to the upside on the day, driving the NYSE Arca Networking Index up by 3.3 percent. With the jump, the index reached its best closing level in over a month.
Ciena (CIEN) led the networking sector higher, surging up by 15.8 percent after reporting better than expected second quarter results.
Significant strength was also visible among biotechnology stocks, as reflected by the 2.3 percent gain posted by the NYSE Arca Biotechnology Index. XBiotech (XBIT) and Minerva Neurosciences (NERV) posted standout gains.
Telecom, financial, housing and internet stocks also saw considerable strength, moving higher along with most of the other major sectors.
