U.S. Stocks Holding On To Gains In Afternoon Trading

After seeing significant volatility early in the session, stocks have moved mostly higher over the course of the trading day on Friday. The major averages have all moved to the upside after ending yesterday’s lackluster session modestly lower.

Currently, the major averages are off their highs of the session but still in positive territory. The Dow is up 234.89 points or 0.7 percent at 35,450.78, the Nasdaq is up 124.68 points or 0.9 percent at 14,084.40 and the S&P 500 is up 26.24 points or 0.6 percent at 4,528.13.

The strength on Wall Street comes after the Labor Department released a report showing employment in the U.S. increased by less than expected in the month of July.

The report said non-farm payroll employment climbed by 187,000 jobs in July after rising by a downwardly revised by 185,000 jobs in June.

Economists had expected employment to jump by 200,000 jobs compared to the addition of 209,000 jobs originally reported for the previous month.

Meanwhile, the Labor Department said the unemployment rate edged down to 3.5 percent in July from 3.6 percent in June. Economists had expected the unemployment rate to remain unchanged.

The Labor Department also said average hourly employee earnings increased by $0.14 or 0.4 percent to $33.74 in July.

Annual wage growth came in at 4.4 percent in July, unchanged from June. Economists had expected the pace of growth to slow to 4.2 percent.

Following the mixed report, most economists still expect another pause in interest rate hikes by the Federal Reserve next month, although the data has led to some uncertainty about the outlook for rates beyond that.

“To be sure the next Fed meeting is still 47 days away with a heavy package of data for the Fed and markets to absorb, but wage-related data will remain at the top of the market’s focus as the Fed makes a decision as to whether the economy needs another rate hike to cool demand,” said Quincy Krosby, Chief Global Strategist for LPL Financial.

Among individual stocks, shares of Amazon (AMZN) have moved sharply higher after the online retail giant reported better than expected second quarter and provided upbeat revenue guidance for the current quarter.

On the other hand, shares of Apple (AAPL) are seeing notable weakness after the tech giant reported fiscal third quarter earnings that beat analyst estimates but a continued decrease in revenues.

Sector News

Telecom stocks moved sharply higher on the day, resulting in a 10.0 percent spike by the NYSE Arca North American Telecom Index. The index has jumped to its best intraday level in three months.

Telephone and Data Systems (TDS) and United States Cellular (USM) have both skyrocketed after each decided to initiate a process to explore strategic alternatives for UScellular.

Retail stocks are also seeing substantial strength following Amazon’s upbeat results, driving the Dow Jones U.S. Retail Index up by 3.9 percent to its best intraday level in over a year.

Significant strength is also visible among housing stocks, as reflected by the 1.7 percent gain being posted by the Philadelphia Housing Sector Index.

Gold, oil and chemical stocks are also seeing considerable strength on the day, while tobacco stocks have shown a notable move to the upside.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Friday. Japan’s Nikkei 225 Index inched up by 0.1 percent, while Hong Kong’s Hang Seng Index climbed by 0.6 percent.

The major European markets also moved to the upside on the day. While the French CAC 40 Index advanced by 0.8 percent, the U.K.’s FTSE 100 Index and the German DAX Index rose by 0.5 percent and 0.4 percent, respectively.

In the bond market, treasuries have shown a significant rebound after moving sharply lower in recent sessions. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 11.5 basis points at 4.074 percent.

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