Stock Market News For April 10, 2017

Benchmarks declined only marginally on Friday, dragged down by weaker-than-expected March jobs data and President Trump’s surprise attack against an airbase near Homs, Syria. The jobs data showed an increase of 98,000 jobs in March, marking the smallest gain in almost a year. Moreover, New York Fed President William Dudley’s comments to avoid simultaneous rate hike along with Fed’s plan to reduce its balance sheet, adversely affected the equity market.

For a look at the issues currently facing the markets, make sure to read today’s Ahead of Wall Street article.

The Dow Jones Industrial Average (DJI) declined 6.85 points to close at 20,656.10. The S&P 500 fell 1.95 points or 0.1% to close at 2,355.54. The tech-laden Nasdaq Composite Index closed at 5,877.81, declining 1.14 points. The fear-gauge CBOE Volatility Index (VIX) gained 3.9% to settle at 12.87. A total of around 3.05 billion shares were traded on Friday in NYSE. Decliners outpaced advancing stocks on the NYSE. For 45% stocks that advanced, 51% declined.

Nonfarm Payroll Data

Investors digested the Labor Department report released on Friday which showed that the U.S. created 98,000 jobs in March, much lower than what was expected. Nonfarm payrolls grew by only 98,000 in March to mark the smallest gain since May last year. One of the reasons for this weak payroll growth number was weather-related effects of the big storm that hit the Northeast last month. After a huge gain in February, construction fell drastically, with gains of only 6,000 witnessed against the increase of 59,000 experienced in February. Retail sector saw a decrease of 30,000 jobs with employment in general merchandise stores falling by 35,000.

On the positive side, unemployment rate declined from 4.7% to 4.5%, its lowest level in almost ten years. Payrolls data also showed that average hourly wages increased 0.2% to $26.14. The hourly pay rose 2.7% over the last twelve months ending March 2017. Additionally, the labor force participation rate for March held steady at 63.0%. The "U-6" is considered to be a broader measure of the unemployment as it includes those workers who are working part-time for purely economic reasons. U6 unemployment declined to 8.9%, due to the decrease in unemployment.

While the actual unemployment figure was within the range of predictions, the number of jobs created missed economists’ expectations by nearly 80,000. Moreover, the number of job additions for January and February were revised down a cumulative 38,000 with 216,000 jobs witnessed in January followed by another 219,000 in February. Consequently, weaker-than-expected March jobs data had a negative impact on investor confidence.

Strike against Syria

The U.S. carried out a cruise missile attack on Shayrat air base near Homs on Thursday night, in a possible attempt to target President Bashar al-Assad’s regime which was held responsible for the chemical weapons attack in Syria last week.

Shares of defense contractors rose. Some of defense sector’s key holdings including L3 Technologies Inc. (NYSE:LLL) , General Dynamics Corp. (NYSE:GD) and Tomahawk cruise missile maker Raytheon Company (NYSE:RTN) gained 1.8%, 1% and 1.5% respectively. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

The surprise intervention in Syria was carried out amid the tense meeting between Trump and Xi Jinping. Investors closely followed the summit given heightened expectations that the heads of the world’s largest economies would find suitable solutions regarding trade and other issues.

Dudley Comments

The broader market also suffered some losses after William Dudley, president of the New York Fed, commented that Fed Reserve might avoid raising key interest rates at the time of unwinding $4.5 trillion bond portfolio from its balance sheet.

Dudley's remarks helped U.S. Treasury yields to rise which again pushed dividend paying companies in back foot. The bond price declined which resulted in increase of treasury yield, ultimately pushing equities lower.

Weekly Loss

For the week, the Nasdaq, S&P 500 and Dow declined 0.6%, 0.3% and 0.03% respectively. During the week, the benchmarks suffered a setback after the release of minutes from the Federal Reserve. Weak auto sales data and a dip in manufacturing growth rate also had an adverse impact on the investor sentiments which eventually led the benchmarks to finish in the red.

Stocks that made Headlines

Alphabet's Google Charged with Gender-based Pay Disparity

Alphabet Inc.'s (NASDAQ:GOOGL) division Google allegedly practices pay discrimination against its female workforce, according to The Guardian, which quoted the U.S. Department of Labor (DoL). (Read More)

Southwest Airlines March Traffic Grows, Stock Up

Low-cost carrier Southwest Airlines Co. (NYSE:LUV) saw its shares gain 2.17% to $54.54 at the close of business on Apr 7, following the disclosure of its traffic report for the month of March. (Read More)

Cenovus Prices $2.9B Debt Offering to Fund Acquisition Deal

Calgary-based energy player Cenovus Energy Inc. (TO:CVE) recently priced U.S. $2.9 billion of senior notes. (Read More)

Zacks' Hidden Trades

While we share many recommendations and ideas with the public, certain moves are hidden from everyone but selected members of our portfolio services. Would you like to peek behind the curtain today and view them?

Starting now, for the next month, I invite you to follow all Zacks' private buys and sells in real time from value to momentum...from stocks under $10 to ETF to option movers...from insider trades to companies that are about to report positive earnings surprises (we've called them with 80%+ accuracy). You can even look inside portfolios so exclusive that they are normally closed to new investors. Click here for Zacks' secret trade>>