Stocks Recapture Thursday’s Losses
Stocks in the US started the trading session on a positive note, but momentum has been negative throughout most of the week. Earning continued to top forecasts with Disney (NYSE:DIS) notching up solid gains. France experience a debt downgrade as S&P cut their credit rating. US employment data continued to show moderate gains. Stock ending the trading session in the black, recapturing most of Thursday’s losses. The S&P 500 closed up 0.51% for the week while the Nasdaq remained in the red. The Dow Industrial average notched up a 0.94% gain hitting an all-time high.
Equities were initially boosted by Thursday surprise rate cut by the ECB. The central bank cut its refinance rate which is the rate at which banks lend to one another. The ECB reduced their benchmark rate to 25 basis points from 50 basis points sending a message to market participants that the ECB will continue to generate easy policy for the foreseeable future.
On Friday the BLS released the October employment report. US non-farm payrolls grew by 204,000 jobs beating expectations of a gain of 120K e. The unemployment rate climbed to 7.3% compared to 7.2% in September. The Bureau of Labor Statistics said the private sector added 212,000 jobs in October, the strongest gain since February. The BLS stated that the government shutdown accounted for approximately 450K jobs that were lost during October with regard to the household survey.
In corporate news, Disney’s earnings beat analysts’ forecasts. Disney’s shares slipped despite Q4 net income rising 8% to $6.1 billion, with adjusted earnings per share of $0.77 beating expectations. Revenue climbed 7.7% to $11.57 billion and also surpassed forecasts. Good performances at three of Disney’s major divisions which include theme parks, consumer products and movies outweighed television-related declines.
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