BLS Buzzkill Fails To Stop Stock Market Advance
Wall Street Sector Selector | Aug 04, 2013 02:26AM ET
The sun used to rise and set on the stock market, depending on the results of the monthly non-farm payrolls report from the Department of Labor’s Bureau of Labor Statistics. On Friday, it made absolutely no difference. Despite the huge shortfall, with only 162,000 new non-farm payroll jobs added in July – missing expectations of 185,000 – the Dow Jones Industrial Average and the S&P 500 Index finished the session at new record-high closing levels. Surprisingly, the Russell 2000 Index – which hits record highs with the regularity of a geriatric on Metamucil, prunes and yogurt – missed a new record close by a gap too small to accommodate a nanoparticle.
The payrolls disappointment cloud had a silver lining because most investors believed it would discourage the Fed from being too quick with the taper trigger. Bad news for employment is good news for the longevity of the quantitative easing program. On the other hand, the drop in the labor participation rate from 63.5 percent to 63.4 percent helped to push the unemployment rate down from 7.6 percent last month to 7.4 percent. Keep in mind that Ben Bernanke has been discussing a 7 percent unemployment rate as a threshold for beginning the taper.
The Dow Jones Industrial Average (DIA) picked up 30 points to finish Friday’s trading session at another record-high close of 15,658.36 for a 0.19 percent advance. The Dow retreated 32 basis points from a new intraday record high of 15,658.68. The S&P 500 (SPY) rose 0.16 percent to finish the week at a record high of 1,709.67.
The Nasdaq 100 (QQQ) climbed 0.55 percent to finish at 3,143. The Russell 2000 (IWM) actually retreated by less than one basis point from Thursday’s record-high close of 1,059.88 to end the week at 1.059.86. Wow!
In other major markets, oil (USO) declined 0.86 percent to close at $37.94.
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