Market Update & Important Indicators
The Dow Jones Industrial Average rose more than 200 points Friday to recoup most of its losses for the week following an upbeat unemployment report that showed a modest gain in wages. Investors got a dose of good news about the U.S. economy after the Labor Department released its May unemployment report, which showed a healthy gain in jobs that pushed the unemployment rate to 3.8%, the lowest since April 2000, and a modest gain in wages. The robust jobs report helped steady a stock market that had been struggling this week with concerns about escalating trade tensions and eurozone stability, which eased after Italy struck a deal on a coalition government. The Dow industrials added 219 points, or 0.9%, to 24635. The S&P 500 rose 29 points, or 1.1%, to 2735, while the Nasdaq Composite added 112, or 1.5%, to 7554. Buoyed by the jobs report, investors bought shares of technology companies, a popular trade that contributed to much of the nine-year stock rally's gains. Tech stocks in the S&P 500 rose nearly 2% on Friday, with Facebook adding $2.21, or 1.2%, to $193.99 – its highest close ever. Still, Friday's gains weren't enough to lift the Dow industrials out from the heavy selling it suffered earlier in the week, when political drama in Italy and the Trump administration's push to enact tariffs on key allies sent the Dow down triple digits during two of the four trading sessions. The blue-chip index of 30 stocks fell 0.5% this week, while the S&P 500 and Nasdaq rose 0.5% and 1.6%, respectively. The US Gold price declined 0.4% to 1,293.10 US$/oz.
European shares were broadly higher on relief that Italy has avoided fresh elections, at least for now. The Stoxx Europe 600 climbed 1.2%, or 4.71 points, to 387.77 as Italy's FTSE MIB rose 1.6%, Madrid's IBEX 35 advanced 1.8%, Germany's DAX lifted 1.1% and France's CAC 40 gained 1.4%. Italian bank Banco BPM was the biggest riser, up 8.2%.
Stocks in Hong Kong and Shanghai were mixed Friday as the long-awaited introduction of Chinese shares into a set of global benchmarks took effect. Global index provider MSCI Inc. added around 230 mainland-listed Chinese stocks to its flagship Emerging Markets Index, and other indexes, which is expected to draw billions of dollars from investment funds into yuan-denominated stocks. Hong Kong's Hang Seng rose 0.1% but the Shanghai Composite fell 0.7% on Friday after rising 1.4% and 1.8% respectively on Thursday ahead of the MSCI inclusion.
Australia’s main stock index logged its first 3-week losing streak since late March as the market today was once again irritated by recent sore spots. The S&P/ASX 200 fell 0.4% to 5990.4, putting the week's drop at 0.7%. It's struggled after nearly breaking early 2018's 10-year high, with commodities and financials being key pressure points. Energy fell 0.8% today while financials lost 0.9%, hitting another 19-month low. But materials climbed 0.5%. Notable individuals included ear-implant firm Cochlear jumping 3.7% to fresh record highs.
Base metal prices were mostly positive on the London Metal Exchange. The nickel price gained 1.5% to 15,381/t, while aluminium rose 0.9% to 2,310/t. The 3-month copper contract climbed 0.6% to 6,883/t, as tin added 0.8% to 20,795/t. Zinc remained relatively unchanged, in contrast to lead that dipped 0.5% to 2,433/t.
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