Stock Market News For December 05, 2016

Major U.S. benchmarks closed mixed on Friday following the release of the non-farm payrolls report. Moreover, concerns regarding Italy’s referendum also affected investor sentiment. This led defensive sectors to register healthy gains, while financial sector emerged as the worst performer. Though the Dow extended its winning streak into the fourth straight week, the S&P 500 declined. The tech-heavy Nasdaq posted its biggest weekly gain since Nov 8.

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 0.1%, to close at 19,170.42. However, the S&P 500 rose 0.04% to close at 2,191.95. The tech-laden Nasdaq Composite Index closed at 5,255.65, gaining 0.1%. Meanwhile, the fear-gauge CBOE Volatility Index (VIX) increased nearly 0.4% to settle at 14.12. A total of around 7.03 billion shares were traded on Tuesday, higher than the last 20-session average of 7.94 billion shares. Advancers outpaced declining stocks on the NYSE. For 53% stocks that advanced, 43% declined.

Labor Data in Focus

According to the Bureau of Labor Statistics (BLS), the U.S. economy generated 178,000 jobs in November, compared to 142,000 jobs added previous month. Moreover, unemployment rate declined 0.3 percentage point from October to a nine-year low level of 4.6% last month, better than the consensus estimate of 4.9%. However, labor participation rate declined from 62.8% in October to 62.7% in November.

Separately, BLS reported that average hourly earnings decreased 3 cents or 0.1% to $25.89 previous month, in contrast to the consensus estimate of a rise of 0.2%. Though September jobs additions were revised upward from 191,000 to 208,000, BLS revised down the jobs addition in October from 161,000 to 142,000. A mixed jobs report added to the uncertainty in the stock markets on Friday.

Italian Referendum Raised Concerns

Speculations of rising political uncertainty in Euro-zone following referendum on constitutional reforms in Italy also had a negative impact on benchmarks on Friday. Most of the polls indicated that the major portion of Italian voters will cast their votes against the Prime Minister Matteo Renzi’s proposed constitutional reforms in Sunday’s referendum. If this is indeed true, it may lead Renzi to resign, which is expected to ignite political turmoil in Eurozone including Italy.

These uncertainties had a negative impact on financial stocks, which have posted huge gains in recent times following Donald Trump’s victory in the Presidential election. The Financial Select Sector SPDR ETF (NYSE:XLF) declined 1.1%, registering biggest losses among the broader S&P 500 sectors. Key players in the domain including Citigroup Inc (NYSE:C). (C), The Goldman Sachs Group (NYSE:GS), Inc. ( GS) and Bank of America Corporation (NYSE:BAC) (BAC) lost 2.2%, 1.4% and 1.3%, respectively. While Citigroup currently holds a Zacks Rank #3 (Hold), Goldman Sachs and Bank of America posses Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here .

Meanwhile, rising uncertainties helped safe-haven sectors to attract significant investor attention on Friday. Among others, the Real Estate Select Sector SPDR (XLRE), Utilities Select Sector SPDR ETF (NYSE:XLU) and Consumer Staples Select Sector SPDR ETF (NYSE:XLP) gained nearly 1%, 0.9% and 0.6%, respectively.

How Did U.S Markets Perform Last Week?

While the Dow gained 0.1% last week, the S&P 500 and Nasdaq registered losses of 1% and 2.7% during the week. Energy stocks were the leading gainers. OPEC’s production cut decision helped oil prices gain traction. OPEC overcame disagreements between the group’s largest producers, Saudi Arabia, Iran and Iraq, by agreeing on Nov 30 to trim output by about 1.2 million barrels a day by Jan 2017.

Separately, financials continued to enjoy the rally they have been experiencing since Trump’s victory. Also, rising chances of a rate hike after the December policy meeting boosted the sector. Meanwhile, most of the economic data released last week was encouraging. This includes better-than-expected third quarter GDP and ISM manufacturing data, nine year high consumer confidence and seven-month high construction spending.

Stocks That Made Headlines

BP (LON:BP) Approves Mad Dog Phase 2 Project, Strengthens U.S. Ties

BP plc (BP) recently took initiative to further strengthen its ties with the U.S. through the approval of the Mad Dog Phase 2 project in the country. ( Read More)

Pandora (P) Surges on Merger Speculation with Sirius (SIRI)

Shares of Pandora Media Inc. (P) were up over 16% on Friday after financial news provider, Bloomberg reported that satellite radio company Sirius XM Holdings Inc. (SIRI) has made a fresh offer to acquire music streaming services provider. ( Read More)

Delta (DAL) Up on Improved November PRASM Performance

Continuing its trend of bullish performance, the Atlanta, GA-based airline behemoth, Delta Air Lines (NYSE:DAL) (DAL) delivered encouraging traffic report for November. ( Read More)

B&G Foods (BGS) Takes Over Victoria Fine Foods for $70M

Snack foods manufacturer B&G Foods, Inc. (BGS) seems to be on an acquisition spree. ( Read More)

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