The stock market closed mixed on Friday but narrow losses failed to erase big gains posted earlier in the week. Hot job numbers in the premarket triggered divergent action, with banks rallying and big tech selling off.
The Nasdaq composite closed 0.5% lower while the S&P 500 lost 0.2%. The Dow Jones Industrial Average gained 0.2%. The small-cap Russell 2000 index gained 0.8%.
Volume fell on the Nasdaq and the NYSE vs. the same time on Wednesday, according to preliminary closing data.
On the week, the Nasdaq rose 2.1%, the S&P closed 0.4% higher and the Dow lost 0.1%.
U.S. Stock Market Today Overview
Last Update: 4:22 PM ET 8/5/2022
The Labor Department’s July jobs report was released on Friday morning. The U.S. economy added 528,000 jobs, much higher than the expected 250,000 increase, per Econoday. The unemployment rate came in at 3.5%, better than the 3.6% estimate.
Stock Market Ends An Up-Week With ‘Sour’ News On Jobs
The solid jobs report was seen by some investors as bad news for the stock market. Many are counting on the economy being weak enough for the Federal Reserve to shift from rate hikes to rate cuts in the first half of 2023.
“The strong gains in the job market last month should further cement the claim that the U.S. is currently not in recession,” said Jeffrey Roach, Chief Economist for LPL Financial. “The decline in unemployment and the participation rate will frustrate central bankers since a tighter labor market adds inflation risk to the economy. So far, earnings have not kept up with inflation.”
The 10-year U.S. Treasury yield rose eight basis points to 2.84%. Crude oil prices were down 0.2% to $88.31 per barrel.
The Energy Select Sector ETF (XLE) was the big winner, up 2.3%, making it the best performing S&P sector.
Square-parent Block (SQ) erased early losses but still closed down 2.5% after a mixed earnings report. The company reported June-quarter earnings and revenue that fell from a year earlier but still beat estimates.
SQ shareholders may have hit the exits because two other financial metrics, operating profit and gross payment volume, also missed consensus views.
Tesla (TSLA) stock traded 7% lower after shareholders approved plans for a 3-for-1 stock split.
Mixed Earnings Flood Market But Lead To Opportunities
An array of stocks presented investors with a mixed bag of earnings results on Friday. Reporting companies included AMC Entertainment (AMC), Amgen (AMGN), Funko (FNKO), Lyft (LYFT) and Vertex Pharmaceuticals (VRTX).
AMC stock gained nearly 19% after beating Q2 earnings estimates but missing on sales.
Amgen shares edged lower. Funko crashed 18% while Lyft soared 13%. Vertex rose 4.5%.
This week’s earnings reports also led to many IBD 50 stocks approaching buy points or forming bases. Among them are Axcelis Technologies (ACLS), Monolithic Power Systems (MPWR), Sarepta Therapeutics (SRPT), Green Brick Partners (GRBK) and Repligen (RGEN).
The Innovator IBD 50 ETF (FFTY) gained 1%.
Global Blood Therapeutics (GBT) produced much of the gains, soaring 26% on rumors that Pfizer (PFE) is in “advanced talks” to acquire the company for about $5 billion. GBT makes a sickle cell disease treatment called Oxbryta for patients age 4 and older.
According to the Wall Street Journal, Pfizer is set to finalize the deal for Global Blood in the coming days.
Walt Disney (DIS) will headline another busy week of earnings reports as the stock market grows more optimistic about a soft landing for the U.S. economy. Other strong price performers with earnings coming up include Celsius (CELH), Aspen Technology (AZPN), Grocery Outlet (GO) and Shockwave Medical (SWAV).
Follow Michael Molinski on Twitter @IMmolinski
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