Stocks rise, U.S. labor market remains strong, regional banks recover as employment data shows

Finance


U.S. stocks rose Friday as investors digested the Labor Department’s April jobs report that showed growth slowed, although the U.S. labor market remained strong. That has given investors hope that the Federal Reserve may pause rate hikes at next month’s meeting.

The Federal Reserve (Fed) raised interest rates again by another 0.25% as earnings of major companies such as Apple (AAPL), Starbucks (SBUX) and Ford (F) turned almost positive. Of the quarter.

The S&P 500 (^GSPC) was up 1.45% in afternoon trading, while the Dow Jones Industrial Average (^DJI) was up 400 points (1.2%). The technology-focused Nasdaq Composite (^IXIC) rose 1.77%.

A flight to traditional ‘safe haven’ assets like gold (GC=F) has led to regional bank It eased on Friday following turbulence within the sector. .

Regional bank stocks including PacWest Bancorp (PACW), Western Alliance Bancorp (WAL) and Zions (ZION) were all on Thursday as PacWest explored strategic options, including a potential sale or capital increase. It showed a double-digit decline amid reports that it was That, combined with the acquisition of First Republic by JPMorgan Chase (JPM), still fresh in investors’ minds, resulted in heavy losses within the sector.

However, those share price moves were reversed at Friday’s opening, with PacWest, Western Alliance and Zions up around 80%, 38% and 18% respectively.

Gold prices fell, but traded near record highs at $2,021.00 per ounce, with the benchmark 10-year Treasury bond yield (^TNX) rising nearly 10 basis points to trade near 3.46%.

WTI Crude (CL=F) and Brent Crude (BZ=F) traded around $71.09 and $75.03 a barrel as prices fell on cost pressures such as the Fed’s decision and rising US gasoline inventories. it was done. Each.

Federal Reserve Chairman Jerome Powell speaks at a press conference in Washington, Wednesday, May 3, 2023, following a meeting of the Federal Open Market Committee. US stock futures rose Friday morning as investors eagerly await the Labor Department's April jobs report, which will be released at 8:30 a.m. ET.  (AP Photo/Carolyn Custer)

Federal Reserve Chairman Jerome Powell speaks at a news conference in Washington, Wednesday, May 3, 2023. (AP Photo/Carolyn Kaster)

Investors continue to follow the Fed’s rate hike decision as Fed Chairman Jerome Powell hinted that the Fed may put rate hikes on hold , but the door remains open for further rate hikes in the future.

Powell said at a press conference on Wednesday that “the decision to suspend was not made today,” but that “we… have a feeling this is closer to the end than the beginning.” .

Friday’s employment data, especially those surrounding strong wage growth, will be a key factor in the Fed’s interest rate policy going forward.

Non-farm payrolls rose by 253,000 in April while the unemployment rate fell to 3.4%. Economists surveyed by Bloomberg expected the U.S. economy to add 185,000 nonfarm jobs last month, with the unemployment rate rising slightly to 3.6%.

Average hourly wages were also better than expected, up 4.4% year-on-year against expectations of 4.2%.

However, employment growth is slowing. March job growth was revised down to show 165,000 jobs were created in the month, 71,000 less than previously reported. February’s employment gains were also revised down, dropping from 326,000 to 248,000.

“With revised data at hand, the trend in labor market activity has been punctuated by April’s month-long strength,” JPMorgan Chase & Co. economist Michael Feroli said in a research note. “But it looks like it’s slowly cooling off. We still think Wednesday’s rate hike was the last rate hike.” But I’m not ruling out a final rate hike at the June meeting.”

Friday’s employment data comes after the week’s first unemployment claims beat expectations. A report released Thursday said 242,000 unemployment claims had been filed, up 13,000 from the previous week’s revised level.

FILE - Wednesday, September 21, 2022, a sign for help appears in Deerfield, Illinois. On Thursday, the Labor Department will report how many people have filed for unemployment benefits in the last week.  (AP Photo/Nam Y. Huh, file)

FILE – Wednesday, September 21, 2022, a sign for help appears in Deerfield, Illinois. On Thursday, the Labor Department will report how many people have filed for unemployment benefits in the last week. (AP Photo/Nam Y. Huh, file)

Friday afternoon top trending stocks.

Apple (APPL), Yahoo Finance’s top trend ticker, surged more than 4% on Friday after reporting better-than-expected quarterly earnings on better-than-expected iPhone sales.

Blocks (SQ) outperformed earnings both top and bottom lines, but traded relatively flat. The company also boosted its full-year outlook as its popular Cash App payment platform continues to drive growth.

Shopify (SHOP) rose 7% in afternoon trading after gaining nearly 24% on Thursday. The e-commerce company has announced a major strategic shift, selling its logistics business and laying off 20% of its workforce.

Carvana (CVNA), which opened up about 40%, held gains to about 26% in mid-afternoon trading after narrowing losses and better-than-expected earnings. Online used car retailers have launched massive cost-cutting campaigns after 2022 has been a terrible year for investors.

The Draft Kings (DKNG) rose more than 16% on Friday after strong earnings. The company has raised its 2023 earnings guidance, and for the first time he expects full-year earnings to easily exceed $3 billion.

Lyft (LYFT) fell another 21% after reporting disappointing Q2 guidance. This was the first earnings report since David Risher took over his CEO position from founder Logan Green in April.

Paramount Global (PARA) recovered slightly from a massive sell-off, trading above 1% on Friday. The company, which underperformed expectations on both sales and earnings, continues to battle advertising headwinds and heavy losses in the streaming sector. The media giant also updated its dividend policy, cutting its quarterly cash dividend from $0.24 to $0.05 per share.

Warner Bros. Discovery (WBD) reported earnings ahead of the bell on Friday, but upped its previous losses by about 3% after earnings fell short of estimates. The media giant says he expects his U.S. direct-to-consumer business to be profitable this year, with streaming profits up to $50 million.

Alexandra Canal Senior reporter at Yahoo Finance. follow her on her twitter @alliecanal8193 Send an email to alexandra.canal@yahoofinance.com.

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