Alison BloomerAll three major indexes have posted gains for the second straight week, despite volume remaining light with a Labor Day weekend looming.
US unemployment rises
An August jobs report reduced the odds of another rate hike this year. More than 156,000 nonfarm jobs were added in August, but this was below the predicted 180,000 nudging the unemployment rate up to 4.4% from 4.3%. Although seen as disappointing, analysts don’t believe it is the start of a more serious downturn.
Kully Samra, UK managing director at Charles Schwab, said: "It should be viewed in the context of solid US and global economic growth, strong earnings, low inflation and still-ample global liquidity which will likely allow the US rally to continue."
Wages also ticked up less than expected with a rise of 0.1%, versus forecasts of 0.2%. This could be good news for stock prices as it is enough to drive consumer spending, but not enough to force an interest rate increase by the Federal Reserve.
The Dow Jones rose 39.46 points, or 0.18%, to 21,987.56, the S&P 500 gained 4.90 points, or 0.20%, to 2,476.55 and the Nasdaq was up 6.67 points, or 0.1%, to 6,435.33. Most of the major industries were up. Telecommunications fell -0.33%.
- Dow 21,987.56 +0.18%
- S&P 500 2,476.55 +0.20%
- Nasdaq 6,435.33 +0.1%
- Russell 2000 1,413.57 +0.59
- NYSE Composite 11,918.08 +0.36%
- Gold 1,329.90 +0.58%
- Oil WTI $47.35 +0.25%
- 10-Year Treasury 2.168 -0.05%
Gas price hikes
Gas prices rose to a two-year high: Shutterstock.comThe impact from Hurricane Harvey on gas pumps could be seen again today as gas prices rose to a two-year high.
Fuel shortages continued as major pipelines feeding the US Northeast and Midwest were shut or severely curtailed. This led gas prices to rise to an average of $2.519 a gallon, the highest since August 2015. The storm and flooding knocked out about 4.4 million barrels of daily refining capacity.
Auto sales surge expected
Detroit car manufacturers see stock rise. Source: Shutterstock.comShares of the Big Three Detroit car manufacturers rose (General Motors +2.24%, Ford Motor Company +2.90%, and Fiat Chrysler Automobiles US +4.82%), with investors expecting a likely surge in demand as residents of the Gulf Coast replace flood-damaged cars and trucks.
Quote of the day: “The economic data that we’ve just gotten - this unemployment data - is probably the last set of clean unemployment data we’re going to have for many, many months as we go through the recovery process from Hurricane Harvey,” said Gary Cohn, President Donald Trump’s top economic adviser. Source: Bloomberg