GREAT AGAIN: Stocks surge on earnings and economic data; Dow climbs 500

NEW YORK (AP) — World stock markets are rallying Tuesday, and U.S. stocks are on track for their second-largest gain in 2018 following strong earnings reports from major U.S. companies in finance and health care. Technology companies are also rising after their recent slump. The Dow Jones Industrial Average rose as much as 502 points.

Even with the big gains, major indexes are still broadly lower for the month following a two-day rout last week that erased nearly 1,400 points from the Dow.

Investors were encouraged by some good news on the economy. The Federal Reserve said output by U.S. factories, mines and utilities climbed in September despite the effects of Hurricane Florence, and the Labor Department said U.S. employers posted the most jobs in two decades in August while hiring continued to increase.

KEEPING SCORE: The S&P 500 index jumped 54 points, or 2 percent, to 2,805 as of 2:45 p.m. Eastern time. The Dow gained 494 points, or 2 percent, to 25,745.

The Nasdaq composite climbed 192 points, or 2.6 percent, to 7,623 as technology companies reversed some of their outsize losses from the last few days. The Russell 2000 index of smaller-company stocks rose 39 points, or 2.6 percent, to 1,592.

Earnings for U.S. companies climbed about 20 percent in each of the first two quarters of 2018 as economic growth picked up and corporate taxes were slashed. Analysts expect similar results in the current period.

Stocks have gyrated over the last three days following a six-day losing streak that included some of their biggest declines of the year. The S&P 500 fell 6.9 percent from its record high on Sept. 20 to its recent low on Thursday. It remains 4.3 percent below that record level.

HEALTHY…: UnitedHealth, the largest U.S. health insurer and provider of privately-run Medicare Advantage plans, once again topped Wall Street forecasts and raised its projections for the year. The stock climbed 4.1 percent to $270.95. Other health insurers also rose. Cigna advanced 3.8 percent to $211.70 and Humana rose 3.4 percent to $327.90. Medicaid service company Molina Healthcare jumped 4.1 percent to $144.26.

Health care products giant Johnson & Johnson added 1.4 percent to $135.89 after it said prescription sales jumped. Its results, too, were stronger than analysts expected.

…AND WEALTHY: Morgan Stanley rose 5.7 percent to $45.94 and Goldman Sachs added 2.4 percent to $220.38 after the two investment banks did better than expected in the third quarter, helped by strong performance in their trading operations and better-than-expected revenue from stock underwriting. Morgan Stanley’s stock has fallen 12 percent this year and Goldman has lost almost 14 percent.

TECH UPDATE: Technology companies rose. Microsoft jumped 2.8 percent to $110.65 and Adobe rallied 8.6 percent to $258.36 after it backed its fourth-quarter profit and revenue forecasts. The stock has jumped 47 percent this year, but had slumped in recent days. Internet companies also advanced. Alphabet, Google’s parent company, rose 2.4 percent to $1,128.80.

Email delivery company Sendgrid climbed 14.8 percent to $35.50 after cloud communications platform company Twilio agreed to buy it for $36.92 per share in stock, or $1.7 billion. Twilio fell 3.4 percent to $73.56.

SUSPENSE FOR NETFLIX: Netflix rose 2.7 percent to $342.04 ahead of its third-quarter report Tuesday afternoon. The streaming video company has struggled over the past three months and has fallen almost 20 percent since its second-quarter report, when it posted disappointing subscriber totals and gave a weaker forecast than analysts expected.

It’s still up 78 percent this year, the third-best of any S&P 500 stock.

O CANNABIS: On Wednesday Canada will legalize marijuana nationwide. While cannabis companies mostly traded lower Tuesday, the stocks have made huge gains this year in highly volatile trading. Tilray fell 5.7 percent to $156.27 while Canopy Growth shed 7.1 percent to $52.87.

On Tuesday Benchmark Capital analyst Mike Hickey started coverage of Tilray with a $200 price target, saying its supply deals with pharmacies and a partnership with drugmaker Novartis will help make it an early leader in the market. Hickey valued the Canadian cannabis market at about $3.2 billion in 2019 and said it will climb to $8.1 billion by 2023.

Tilray’s market value stands at $14.5 billion, up ninefold since it went public in mid-July, and Canopy Growth has more than doubled in value to $12 billion. Canopy announced a $4 billion investment from Corona beer maker Constellation Brands in August. The huge gains reflect investors’ view that that other countries will legalize marijuana in the years to come.

ENERGY: U.S. benchmark crude oil added 0.2 percent to $71.92 per barrel in New York. Brent crude, the international standard, rose 0.4 percent to $81.14 per barrel in London.

Wholesale gasoline rose 1.7 percent to $1.98 a gallon and heating oil picked up 0.6 percent to $2.34 a gallon. Natural gas lost 0.1 percent to $3.24 per 1,000 cubic feet.

BONDS: Bond prices edged lower. The yield on the 10-year Treasury note rose to 3.17 percent from 3.16 percent.

METALS: Gold rose 0.1 percent to $1,231 an ounce. Silver lost 0.2 percent to $14.70 an ounce. Copper slipped 0.3 percent to $2.78 a pound.

CURRENCIES: The dollar rose to 112.27 yen from 111.88 yen. The euro fell to $1.1577 from $1.1584.

OVERSEAS: France’s CAC 40 added 1.5 percent while the DAX in Germany jumped 1.4 percent. Britain’s FTSE 100 rose 0.4 percent. Italy’s FTSE MIB jumped 2.2 percent after the government avoided last-minute delays in presenting a budget plan.

Japan’s benchmark Nikkei 225 rallied 1.2 percent and the Kospi in South Korea was little changed. Hong Kong’s Hang Seng index finished 0.1 percent higher.

___

Marley Jay of The Associated Press contributed to the contents of this article.

stockmarketsurges

TRUMP EFFECT: 14 states hit record low unemployment

WASHINGTON, D.C.– Fourteen states have set new records for low unemployment levels in the last year, according to a recent report issued by the Bureau of Labor Statistics.

As reported by The Hill, eight states saw new record lows in March, including Hawaii (2.1 percent), Idaho (2.9 percent), Kentucky (4 percent), Maine (2.7 percent), Mississippi (4.5 percent), Oregon (4.1 percent) and Wisconsin (2.9 percent).

California also set record lows with the Golden State’s unemployment rate dropping to 4.1 percent, as did Colorado which saw an unemployment rate of just 2.6 percent.

In addition to record low unemployment levels, wages have also increased in recent months. According to the BLS report, average hourly earnings of nonfarm employees averaged $26.82 in March, up from March 2017’s average of $26.11.

The growing American economy and passage of a Republican tax overhaul appear benefitting President Trump as well.  According to a newly released poll by The Associated Press-NORC Center for Public Affairs Research, the president’s approval rating continues to climb in response to America’s booming economic numbers.

As documented in the report, nearly half of Americans surveyed — 47 percent — say they approve of how Trump is handling the economy, his highest rating thus far on any one particular issue. When it comes to tax policy, 46 percent of Americans back Trump’s moves and say they have benefitted personally from the president’s tax reform act.

Heather Dilios, a 46-year-old social worker from Topsham, Maine, told The Washington Times she’s now taking home between $100 to $200 more per paycheck as a result of the new tax law, more than she expected when Trump signed the legislation.

“It’s more about being able to keep what is rightfully mine rather than giving it to the government,” said Dilios.

March’s numbers follow February’s job boom, during which 313,000 new jobs were created in the U.S.

“Job growth was the strongest since President Trump’s election, with 313,000 jobs created in the month of February,” the U.S. Department of Commerce reported March 9. “The non-stop job creation since the election has yielded 2.9 million jobs. For the fifth month in a row, the unemployment rate remained at 4.1%, a 17-year low. Goods-producing industries such as manufacturing, mining and logging, and construction collectively had the highest month-to-month growth since 1998. These were among many sectors experiencing significant growth.”

“President Trump’s tax reform continues to boost economic confidence with more than 400 companies handing out bonuses, raises, or other benefits to more than 4 million Americans,” the report continued. “Today’s report shows that average hourly earnings significantly increased in February and have increased by 2.6% over the last year. We saw positive movement in the labor force participation rate, and we would like to see that continue over the coming months.”

trumpthumbsup2

MAKING AMERICA GREAT AGAIN: Jobless claims fall to 49 year low

WASHINGTON, D.C. — U.S. jobless claims have fallen to the lowest level since 1969, according to a report published Thursday by Marketwatch (https://tinyurl.com/yd9gfxt5).

The new numbers bypassed the expectations of economists surveyed by Marketwatch and Reuters who had expected the claims to total 226,000. The actual four-week average fell by 5,000 to 220,000, states the report.

“The latest decline in weekly claims shows a tight labor market is increasingly pushing employers to hold on to existing staff amid a persistent shortage of qualified workers,” reports Bloomberg (https://tinyurl.com/y97ra5o5). “Applications for jobless benefits are well below the 300,000 tally that’s typically considered consistent with a healthy labor market.”

The Labor Department also revised the number of unemployment claims reported for the previous week, saying that it was 2,000 lower than had been erroneously reported.

The numbers prompted President Donald Trump to take to Twitter, where he praised the economy.

“Unemployment filings are at their lowest level in over 48 years. Great news for workers and JOBS, JOBS, JOBS! #MAGA,” the president tweeted (https://tinyurl.com/y8qlshns).

When running for president, Trump vowed to be the “best job creating president of all time”. Many economists say the president has not only met, but exceeded that goal.

“Economists surveyed by The Wall Street Journal say President Donald Trump has had generally positive effects on U.S. economic growth, hiring and the performance of the stock market during his first year in office,” Town Hall reported in January (https://tinyurl.com/yd73d5vv).”The professional forecasters also predicted 2018 would see solid growth and a continued decline in the jobless rate. One factor: the tax cuts signed into law by Mr. Trump in December, which most economists say will boost the economy for several years at least.”

trumpeconomy1

TRUMP EFFECT: US JOB OPENINGS SURGE TO RECORD HIGHS, SAY REPORTS

WASHINGTON, D.C.– The U.S. labor market has hit a record high under the first six months of the Trump administration, according to a report by the labor department issued on Tuesday.

According to the July Job Openings and Labor Turnover Survey, or JOLTS, job vacancies rose by 461k, the most for a single month’s time in almost two years, to 6.16 million with a majority of the jobs in demand being in the health care and social assistance industry and for professional and business services. Further, in the per annum through June, the economy created a net 2.3 million jobs, representing 63.4 million new hires.

July figures released last week document also documented that payrolls increased more than forecast while the unemployment rate matched a 16-year low.

Indeed, as the surge of employers pleased with the incentives offered by the Trump administration again begin recruiting after years of hiring freezes, the danger shifts, say experts, from a slumping job market to too many jobs and not enough vacancies to fill them.

“Companies are running out of workers to hire to do the job or even train to do the work, and this is a ticking time bomb for economic growth,” Chris Rupkey, chief economist at MUFG in New York told Reuters (https://www.reuters.com/article/us-usa-economy-jobs-idUSKBN1AO1OP).

Coinciding with the JOLTS report, a July National Federation of Independent Business report showed showed job openings at a 16-year high. Economists excited over the latest trend say they have every reason to believe the surge in job creation to continue under the Trump administration.

“The JOLTS report continues what has been a reasonably strong run for the labor market data, and we expect continued improvement in the job market to keep upward pressure on wages,” Daniel Silver, an economist at JPMorgan in New York told Reuters.

Even critics of the Trump administration have come forward to praise the most recent job numbers.

“Kind of an all-around strong headline number,” said Tony Bedikian, head of global markets at Citizens Bank told MSNBC (https://www.cnbc.com/2017/08/04/us-nonfarm-payrolls-july-2017.html). “More people are coming into the labor force and finding jobs. It’s difficult to find anything really negative in the report.”

trumpeconomy

‘THE TRUMP EFFECT’: JOB GROWTH IN MAY SURPASSES STOCK MARKET EXPECTATIONS

WASHINGTON, D.C. — President Donald Trump’s campaign promise to “make America great again” certainly seems to be one he’s keeping, at least when it comes to jobs.

According to the May National Jobs Report by ADP (http://adpemploymentreport.com/2017/May/NER/NER-May-2017.aspx), the private sector added 253,000 jobs last month, nearly Wall Street’s expectation of 185,000 jobs.

“Job growth is rip-roaring,” Mark Zandi, chief economist of Moody’s Analytics, said in a statement. “The current pace of job growth is nearly three times the rate necessary to absorb growth in the labor force. Increasingly, businesses’ number one challenge will be a shortage of labor.”

Service jobs led the way adding 205,000 new jobs, with professional and business services contributing 88,000 — its best month in about three years — and education and health services added 54,000 more.

To put the totals in context, it was the fourth time this year and the sixth time in the last seven months that the ADP count put total job creation above 200,000, a phenomenon that industry analysts have dubbed “the Trump effect”.

The stock market was quick to respond as the market pushed into record territory on Thursday in light of the report.

As reported by Marketwatch (http://www.marketwatch.com/story/us-stocks-on-track-to-edge-higher-rebounding-from-two-day-dip-2017-06-01), the S&P 500 index SPX, +0.56% gained 13 points, or 0.6%, to 2,425, trading near its intraday record of 2,426.08. The Dow Jones Industrial Average DJIA, +0.47% rose 112 points, or 0.5%, to 21,120, near its high of the session. The Nasdaq Composite Index COMP, +0.60% climbed 31 points, or 0.5%, to 6,229, hovering around its intraday all-time high of 6,233.42.

“I can’t predict the future but this is not a bad environment we are in. The Fed is going to raise rates but they are going to do it in a way to encourage growth. Earnings expectations are rising and the economy is rising,” John Manley, chief equity strategist at Wells Fargo Funds told the financial news agency.

The Bureau of Labor Statistics is expected to release its own report on job numbers this Friday. It’s numbers are expected to mirror those of the ADP report.

trumpeffect