The U.S. stock markets fluctuated again as investors weigh the current situation of the labor market in the country based on the jobs report released by the Department of Labor today. The S&P 500 and Nasdaq ended the trading session higher with 0.23% and 0.44% gains, respectively. On the other hand, the Dow Jones Industrial Average (DJIA) ended the week with a slight decline of 0.05%.
Data from the Department of Labor showed that the economy added only 74,000 jobs in December compared with the 200,000 jobs added in the previous month. The growth rate last month was the lowest jobs growth since January 2011. According to the agency, the unemployment rate dropped to 6.7% primarily due to fact that many workers left the labor force.
The number of jobs added in December is significantly lower than the 193,000 additional jobs projected by economists. The government suggested that the unusually cold weather in some parts of the country mat have affected construction jobs as the industry lost 16,000 jobs last month.
Commenting on the jobs report, Quincy Krosby, market strategist at Prudential Financial Inc told Bloomberg, “This could actually be good news for the market. If these numbers don’t get revised upward, it will keep the Fed careful about wanting to taper too quickly.”
Last month, the Federal Reserve announced that it would start tapering its $85 billion month bond-buying program to $75 billion citing faster economic growth. One of the factors considered by policy makers in reducing the quantitative easing is the improvement of the labor market.
Moody’s Analytics chief economist Mark Zandi projected that it would take until 2016 for the United States to arrive at 5.5% unemployment rate.
- Dow Jones Industrial Average (DJIA)- 16,437.05 (-0.05%)
- S&P 500- 1,842.77 (+0.23%)
- NASDAQ- 4,174.66 (+0.44%)
- Russell 2000- 1,163.52 (+0.45%)
- EURO STOXX 50 Price EUR- 3,104.15 (+0.45%)
- FTSE 100 Index- 6,739.94 (+0.73%)
- Deutsche Borse AG German Stock Index DAX- 9,473.24 (+0.55%)
Asia Pacific Markets
- Nikkei 225- 15,912.06 (+0.20%)
- Hong Kong Hang Seng Index- 22,846.25 (+0.26%)
- Shanghai Shenzhen CSI 300 Index- 2,204.85 (-0.78%)
Stocks in Focus
The shares of Abercrombie & Fitch Co (NYSE:ANF) gained nearly 12% to $37.19 per share after the company increased its earnings / full year guidance in the range of $1.55 to $1.65 per share from its previous estimate of about $1.40 to $1.50 a share. Abercrombie chairman and CEO Mike Jeffries said, "We continue to focus on execution against our long-term strategic plans, which we believe will drive meaningful improvements in our business in 2014 and beyond."
Intuitive Surgical Inc (NASDAQ:ISRG) surged more than 8% to $420.15 per share after an analyst at SunTrust Robinson said that the new robotic surgery system of the company has 80% chance of receiving approval by the end this year.
The stock price of Intercept Pharmaceuticals Inc (NASDAQ:ICPT) continued to surge. The stock closed at around $445.83 per share, an increase of another 61.61%. Yesterday, the pharmaceutical company gained 281% after revealing that the clinical trial for its liver drug, obeticholic acid (OCA) was stopped early by Data Safety Monitoring Board (DSMB) after finding clear evidences that patients receiving the treatment demonstrate significant improvement.