Day Traders Diary
Wall Street finished mixed on Friday, as investors digested better-than-expected economic data while shares of Amazon (AMZN 1626.23, -92.50, -5.4%) fell on disappointing guidance. The S&P 500 added 0.1%, increasing its weekly gain to 1.6%.
The Dow Jones Industrial Average (+0.3%), the Nasdaq Composite (-0.3%), and the Russell 2000 (+0.2%) for their part finished with weekly gains of 1.3%, 1.4%, and 1.3%, respectively.
The S&P 500 energy (+1.8%), information technology (+0.6%), and financial (+0.5%) sectors outperformed the broader market. Conversely, the consumer discretionary (-1.8%) and real estate (-0.7%) sectors underperformed.
Stocks began the day modestly higher on the fact that the U.S. job market and the manufacturing sector did just fine in January despite the negativity surrounding market volatility, the partial government shutdown, and economic growth prospects.
Specifically, January nonfarm payrolls increased by 304,000 (Briefing.com consensus 160,000), and the January ISM Manufacturing Index improved to 56.6% (Briefing.com consensus 53.6%) from 54.3% in December.
The strong jobs data sparked selling interest in the bond market, driving yields higher, which were a drag on rate-sensitive real estate and utility stocks. The 2-yr yield rose four basis points to 2.50%, and the 10-yr yield rose six basis points to 2.69%.
Amazon, too, was a huge drag throughout the day after it disappointed investors with Q1 guidance below expectations. The company's cautious view was a reflection of growing worries about the pace of economic growth (and consumer spending) in the near future, which weighed on the consumer discretionary space.
On the other hand, the energy sector's outsized gain was the result of higher oil prices ($55.28/bbl, +$1.51, +2.8%) and a positive reaction to earnings beats from Dow components Exxon Mobil (XOM 75.92, +2.64, +3.6%) and Chevron (CVX 118.37, +3.72, +3.2%).
Fellow Dow component Merck (MRK 76.45, +2.02) rose 2.7% after it also beat earnings expectations.
Reviewing Friday's batch of economic data, which included the Employment Situation Report for January, ISM Manufacturing Index for January, the final reading for the University of Michigan Index of Consumer Sentiment for January, Construction Spending for November, Wholesale Inventories for November:
Looking ahead, investors will receive Factory Orders for November and auto and truck sales on Monday.