The stock market fell after the December jobs report missed forecasts, erasing mild gains. Financials continued to outperform as Bank of America (BAC) topped a buy point.
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U.S. employers added 199,000 jobs in December, the Labor Department reported this morning. The number marks a sharp decline from the 249,000 jobs created in November. The December total is about half what economists polled by Econoday had expected.
On a brighter note, the unemployment rate dropped to 3.9% from 4.2% the prior month. Economists had forecast 4.1%.
Anu Gaggar, Global Investment Strategist for Commonwealth Financial Network, called the nonfarm payroll number a disappointment, and the impact of omicron wasn’t even fully factored into the report.
U.S. Stock Market Today Overview |
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|---|---|---|---|---|
| Index | Symbol | Price | Gain/Loss | % Change |
| Dow Jones | (0DJIA) | 36231.44 | -5.03 | -0.01 |
| S&P 500 | (0S&P5) | 4695.44 | -0.61 | -0.01 |
| Nasdaq | (0NDQC ) | 15076.61 | -4.26 | -0.03 |
| Russell 2000 | (IWM) | 219.03 | +0.43 | +0.20 |
| IBD 50 | (FFTY) | 42.99 | -0.07 | -0.16 |
| Last Update: 10:16 AM ET 1/7/2022 | ||||
“Overall, this print had mixed messaging – the payrolls growth number may look disappointing, but the underlying story is lack of availability of labor, which is manifesting itself in faster wage growth,” Gaggar said in a note. “The combination of the decline in unemployment rate to below Fed’s long-term equilibrium level and acceleration in wage growth brings the Fed’s March meeting in play for the first rate-hike of this cycle.”
Stock Market Falls On Jobs Report
The news threw cold water on a stock market that’s trying to bounce back from Wednesday’s sell-off.
The S&P 500, Dow Jones Industrial Average and Nasdaq composite fell less than 0.1%. Small caps led as the Russell 2000 rose 0.2%.
Volume fell on the NYSE and Nasdaq compared with the same time on Thursday.
The yield on the 10-year Treasury note climbed two basis points to 1.75%. That’s the highest since March 30, when the yield was at a 2021 peak.
Financial Select Sector SPDR ETF (XLF) climbed 0.7% to a new high as banks and other financials rally on rising yields. Communications services and transportation sectors also performed well.
Financials Lead Stock Market
Bank of America broke out of a cup-without-handle base after rising above the 48.79 buy point. Volume was heavy and the relative strength line is at new highs, two signals that bode well for the breakout.
UMB Financial (UMBF) climbed above the 110 buy point of a flat base. The stock is in a buy zone to 115.50. Volume was weak, but the RS line is at new highs.
Dozens of regional banks continue to make new highs. Zions Bancorp (ZION) is in buy range from the 68.35 buy point of a flat base. First Bancorp Holding (FBP) is in buy range from a 14.92 entry.
Utilities, real estate and health care — sectors that are largely defensive — were down 0.2% to 0.6%. Health Care Select Sector SPDR (XLV) fell below its 50-day moving average.
T-Mobile U.S. (TMUS) slid 5.5% after the wireless carrier reported prepaid subscriptions that missed estimates. The stock has lagged for months and is meeting resistance at an already depressed 50-day moving average.
Innovator IBD 50 ETF (FFTY) fell 0.2%.
Homebuilder Green Brick Partners (GRBK) fell 0.4% and is spending another day below its 50-day line. The stock already gave up all gains from its 28.01 buy point.
Cyclical and industrials stocks such as West Fraser Timber (WFG), Cleveland-Cliffs (CLF), MP Materials (MP) and Commercial Metals (CMC) performed best in the IBD 50.
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