April 18, 2021

George Cafe Journal

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Stock Market Closes Nearly 2% Higher After Seesaw Reaction To Jobs Report

The stock market today worked off a midday slump and closed higher, as the jobs report and bond yields were in focus.




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The stock market opened higher Friday after the jobs report came in much better than expected. U.S. employers added 379,000 jobs in February as the hospitality sector began to recover. The unemployment rate ticked down to 6.2%. Economists had forecast 175,000 new jobs and a 6.3% unemployment rate.

While investors cheered the good news, the report also caused bond yields to rise. The stock market took that as a bad sign, as it has for much of the past few weeks. Indexes reversed lower and the Nasdaq composite was down as much as 2.6%. But stocks started rebounding before noon ET. The 10-year Treasury yield spiked to 1.626% on the jobs report, then eased to 1.554% late Friday.

The Nasdaq closed nearly 1.6% higher and the S&P 500 rose almost 2%. The S&P 500 closed back above its 50-day moving average, but the Nasdaq remained below it. The Nasdaq is back to having a small gain for the year after going negative on Thursday.

Stock Market Rebounds Broadly

U.S. Stock Market Today Overview

Index Symbol Price Gain/Loss % Change
Dow Jones (0DJIA) 31497.94 +573.80 +1.86
S&P 500 (0S&P5) 3841.78 +73.31 +1.95
Nasdaq (0NDQC ) 12920.15 +196.68 +1.55
Russell 2000 (IWM) 217.58 +4.39 +2.06
IBD 50 (FFTY) 43.53 +0.47 +1.09
Last Update: 4:12 PM ET 3/5/2021

The Dow Jones Industrial Average, which held up better this week, added nearly 1.9% Friday. The Russell 2000 index jumped 1.7% as small caps were not left out of the big rebound.

Volume fell from Thursday’s totals, according to early data. Breadth was bullish, with advancers over decliners by about a 7-to-2 ratio on the NYSE and by about 2-1 on the Nasdaq.

The rotation away from growth stocks and into cyclicals was evident in the S&P sectors this week. Energy, transportation, materials and industrials were some of the best performing sectors. Energy shot up nearly 10% as the price of crude oil surged above $65 a barrel. Energy Select Sector SPDR ETF (XLE) rose to a one-year high, up 3.8% on the day.

Will These Stocks Lead A New Rally?

Consumer discretionary, technology and health care (the latter a mix that includes some growth companies) fell more than 1%. Financials rose 4%. Banks are beaming brightly after a jump in yields improved their net interest margins — and their potential profits.

With the stock market in a correction, any stock buys pose big risks. Still, keep an eye on stocks outperforming, which could create buyable opportunities once conditions improve.

Polaris (PII) climbed above the 129.10 buy point of a base-on-base pattern in heavy volume. The relative strength line made a new high, bolstering the breakout.

Gap (GPS) climbed above the 26.71 buy point of a cup-with-handle base in big volume. The apparel company gave a mixed fourth-quarter report. Sales fell 5% despite a 49% surge in online sales, and same-store sales were flat. The company cited coronavirus closures. But earnings beat views and the company gave a bullish outlook.

Innovator IBD 50 ETF (FFTY) reversed higher and closed with a 1.1% gain. Still, the ETF fell for a third straight week. It also closed below the 50-day moving average for the first time since November.

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