Markets Surge Higher After Jobs Report
Unlike other days this week, investors really only cared about one economic report: the Bureau of Labor Statistics job report, which was released this morning. While economists had expected the report to show the addition of 164,000 new jobs in May, it actually came in slightly higher at 175,000 jobs. The only downside to the report was that the unemployment rate increased from 7.5% to 7.6% , with 420,000 more people entering the job market last month.
Market participants didn't seem to care much about the actual rate, however, as the number of jobs was better than expected and the markets rallied as a result. The Dow Jones Industrial Average rose higher by 207 points, or 0.138%, while the S&P 500 increased by 20 points, or 1.28%, and the Nasdaq climbed higher by 1.32%. Both the Dow and the S&P 500 recovered from the past two days when they each fell below milestone marks during intraday trading. The Dow slide below the 15,000 mark on both Wednesday and Thursday, but managed to close above it on both occasions. The S&P 500 fell below the 1,600 mark yesterday when it touched 1,598 for a brief time, but also managed to close above the big 1,600 mark before surging higher today.
Only four of the Dow's 30 components ended the day in the red. This afternoon, I discussed why AT&T and Intel were lower, which you can read about by clicking here. Or stick around to read why Merck and Cisco ended the session in the red.
Shares of Cisco slid lower by 0.24% today after it was announced that the company will be responsible for paying TiVo $294 million of the $490 million the company was awarded after the companies settled a patent dispute today. Google will be responsible for paying the remaining $196 million to TiVo. TiVo shareholders had expected a larger amount, thus shares fell 19.04% today. And while the lower-than-expected payment is bad news for TiVo shareholders, it's good news for those who own Google or Cisco. Today's decline is a onetime thing, and investors shouldn't make any hasty moves based on this information.
Merck moved lower by 0.81% today on very little news pertaining directly to the company. Even after today's pullback, shares ended the week higher by 3.19%, which could indicate that investors were simply selling off shares of the pharmaceutical company today so they could buy other stocks with the funds. Merck is seen as a more stable dividend-paying stock since its current yield is 3.7%, so as the week progressed and investors grew more nervous about today's report, they likely bought shares of Merck as a safe play. But after the stronger-than-expected report, they saw better opportunities in other stocks and moved out of the drug business.
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The article Markets Surge Higher After Jobs Report originally appeared on Fool.com.Fool contributor Matt Thalman has no position in any stocks mentioned. The Motley Fool recommends Cisco Systems. Check back Monday through Friday as Matt explains what caused the Dow's winners and losers of the day and every Saturday for a weekly recap. Follow Matt on Twitter @mthalman5513. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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