Stellar jobs data helps Wall Street recoup Brexit losses | Reuters - Firstpost
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Stellar jobs data helps Wall Street recoup Brexit losses | Reuters

  Updated: Jul 8, 2016 23:00 IST

#article   #Business   #Entertainment   #Middle East   #United Kingdom   #United States  

Wall Street recovered all of its Brexit-sparked losses on Friday after data showed that the U.S. economy posted its largest job gains in eight months in June, strongly rebounding from dismal numbers in May.

The economy added 287,000 jobs in the public and private sectors in June, compared with the 175,000 expected by economists.

The robust numbers confirm that the May jobs data, which was revised to 11,000 from 38,000, was an aberration and not indicative of weakness in the labor market.

Unemployment in June rose to 4.9 percent, compared with the estimate of 4.8 percent. A reading below 5 percent indicates full employment.

The data, collected a week before Britain voted on its European Union membership, will feed into the U.S. Federal Reserve's plans on rate hikes but traders do not expect the central bank to move anytime soon.

The Brexit vote set off a global two-day selloff that dragged the three major indexes to their lowest in 10 months in June.

"We'll have to see how the economy weathers the increase in uncertainty from Brexit and the stronger dollar, but there's reason to believe the Fed could start talking about a December rate hike," said Brian Jacobsen, chief portfolio strategist, Wells Fargo Funds Management, Menomonee Falls, Wisconsin.

Financial stocks soared following the jobs report. JPMorgan (JPM.N), Wells Fargo (WFC.N) and Bank of America (BAC.N) rose about 2 percent, and were the top influences on the S&P 500.

The Fed next meets on July 26-27. Traders are pricing in a 22.8 percent chance of a rate hike in December, according to CME Group's FedWatch tool.

At 10:51 a.m. ET (1451 GMT), the Dow Jones Industrial Average .DJI was up 161.69 points, or 0.9 percent, at 18,057.57, the S&P 500 .SPX was up 22.66 points, or 1.08 percent, at 2,120.56 and the Nasdaq Composite .IXIC was up 59.47 points, or 1.22 percent, at 4,936.28.

The rally also put the three indexes on track to book gains for the week.

All major S&P indexes were higher, led by a 1.57 percent rise in the financials sector .SPSY.

The CBOE Volatility index .VIX or Wall Street's "fear gauge", which has swung wildly since the Brexit vote, was near its lowest level this year on Friday.

Gun makers Smith & Wesson (SWHC.O) and Sturm Ruger (RGR.N) rose about 3 percent on expectations of higher gun sales due to fears of potential gun control policies following the worst mass shooting of police in U.S. history. Shares of wearable video camera makers Taser (TASR.O) and Digital Ally (DGLY.O) also surged on the news.

Juno (JUNO.O) dropped 27.4 percent to $29.75 after the drug developer's cancer study was halted following the death of three patients.

Advancing issues outnumbered decliners on the NYSE by 2,546 to 316. On the Nasdaq, 2,162 issues rose and 461 fell.

The S&P 500 index showed 46 new 52-week highs and one new low, while the Nasdaq recorded 88 new highs and nine new lows.

(Reporting by Yashaswini Swamynathan in Bengaluru; Editing by Savio D'Souza and Saumyadeb Chakrabarty)

This story has not been edited by Firstpost staff and is generated by auto-feed.

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