4:05pm: US equities close higher
US stocks closed higher as investors digested the official jobs report for March amid falling oil prices.
The jobs report for March showed that the US economy added 431,000 jobs. The result was below the consensus estimate of 490,000.
Also, the price of US benchmark West Texas Intermediate fell below $100 per barrel as the Biden administration pledged to release more strategic oil reserves.
On the day, the Dow jumped 140 points, or 0.40%, to 34,818 and the S&P 500 rose 0.34% to 4,545. The tech-heavy Nasdaq increased 0.29% to 14,261.
12.05 pm: Equities off to a sluggish start in 2Q
US stocks edged lower in noon trading on strong growth in employment for March.
At midday, the Dow fell 59 points to 34,620, while the S&P 500 eased 14 points at 4,517 and the tech-heavy Nasdaq slipped 58 points to 14,162.
Economic data released on Friday showed the US economy created 431,000 jobs during March, although fewer than expected.
“With some sentiment indicators in the US pointing in the wrong direction, the jobs data also came in weaker than expected, but not as bad as many would have feared given the backdrop,” Premier Miton Investors chief investment officer Neil Birrell said.
“Job vacancies are still being filled and wage growth remains robust, suggesting that the economy is in good shape. That is the case for now; the key will be the impact on the jobs market and broad economy as rates jump higher and growth slows,” Birrell added.
Notable movers included shares of GameStop Corporation, which climbed as much as 9% after the company announced plans to split its stock.
10.05am: Proactive North America healdines:
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9.40am: US benchmarks head higher
US stocks started higher as traders digested a robust set of monthly jobs numbers.
In early deals in New York, the Dow Jones Industrial Average added around 78 at 34,756. The S&P 500 added 12 at 4,542, while then tech heavy Nasdaq Composite index added around 50 points at 14,271.
The US economy created 431,000 jobs in March this year, just 59,000 less than had been expected by economists, while the unemployment rate went down to 3.6% from 3.8% as the tight labor market continues.
"Another solid NFP print today, and it’s one of those where it doesn’t pay to quibble with the details," noted Chris Beauchamp, the chief market analyst at trading platform IG Group.
"US jobs growth is running at an average of over 500,000 per month, which puts the US on track to recoup most of its pandemic losses by year end, although the rate is probably not sustainable.
"Still, Powell’s confident assessment of the outlook for the American economy is well-supported by this afternoon’s numbers, which accounts for the strength in the dollar today."
9.00am: Muted reaction to jobs data
US stocks were poised for muted gains but eased back from earlier levels as investors assessed the latest US jobs report.
Employers added 431,000 jobs in March, slightly below forecasts for 492,000, while the jobless rate fell to 3.6% from 3.8% a month earlier, the Labor Department reported Friday. The report marked the 11th straight month of job gains above 400,000, the longest such stretch of growth in records dating back to 1939. The jobless rate is quickly approaching the February 2020 pre-pandemic rate of 3.5%, which was a 50-year low.
In a brief initial comment, Naeem Aslam, chief market analyst at Avatrade said: "The US data has once given a clear signal that the Fed does need to think carefully about their monetary policy stance as the economy isn’t standing on extremely solid footing. Stock futures have moved lower on the back of the data but gold prices haven’t moved higher because traders believe that another interest rate hike of 25 basis points is still on cards."
Futures for the S&P 500 edged up 0.3%, while those for the Dow Jones Industrial Average and contracts for the technology-focused Nasdaq-100 added both 0.4%.
6.25am: Stronger start predicted
US stocks are expected to open higher on Friday with all eyes on the pivotal US non-farm payroll numbers for March due out this afternoon.
The data will help the US Federal Reserve determine the path for interest rates in the world’s biggest economy. If the labor market remains strong, expectations of quick interest rate rises will solidify further and markets will have to consider if inflation-busting rate increases will choke off economic growth.
Futures for the Dow Jones Industrial Average and those for the S&P 500 were both 0.5% higher; while contracts for the tech-heavy Nasdaq-100 also rose 0.5%.
“The Federal Reserve says inflation rather than jobs is now its primary source of concern. Therefore, it is likely to be more interested in wage growth than the headline jobs data, particularly with a view to forming a decision on whether interest rates should go up at its next policy committee meeting on 4 May, and by how much,” Russ Mould, investment director at AJ Bell said.
“Bond markets have recently been flashing the type of warning signs that have historically come before a recession and so investors will be watching today’s jobs figures like a hawk. Wage growth exceeding forecasts could cause markets to wobble but equally, that might encourage the Fed not to be overly aggressive at its next policy meeting” he added.
Mould noted that the forecast for March is for 492,000 new jobs and for wage growth to reach 5.5% while the unemployment rate is expected to dip to 3.7% in March from 3.8% in February. The data is due out at 8.30 am ET.
Benchmark oil prices futures were modestly higher after tumbling on Thursday following news that the US will release up to 1 million barrels of oil a day from its vast reserves. Brent crude futures were up 0.9% to $105.65 a barrel, while WTI crude futures were 0.6% higher at $100.86 a barrel.
“If history is any indication, strategic oil reserves have a short-term easing effect on oil prices, which is then followed by a rebound to higher levels, as the extra barrels are a quick fix which doesn’t solve the longer-term supply gap,” said Ipek Ozkardeskaya, senior analyst at Swissquote.
Sanctions on Russia’s oil exports after the country invaded Ukraine are leading to supply constraints, fuelling large oil price fluctuations. Notably, however, the key $100 a barrel level continues to hold, leading to worries that another spike may emerge.
Contact the author at jon.hopkins@proactiveinvestors.com