NEW YORK (dpa-AFX) – After a surprisingly strong US labor market report, investors on Friday saw the interim losses as an opportunity to buy. The leading index Dow Jones Industrial gained 1.85 percent to 31,496.30 points at the end of the day, which is an almost equally high plus on a weekly basis. “Old Economy” stocks from the energy and industrial sectors rose, while technology stocks, which had recently come under fire for high valuations, ultimately recovered significantly.
The market-wide S&P 500 increased by 1.95 percent to 3841.94 points at the end of the week. In the technology-heavy Nasdaq 100, investors also came back after a temporary slide to a low since the end of November: the index closed 1.64 percent higher to 12,668.51 points.
According to the US job report, the yield on ten-year paper initially rose to more than 1.6 percent. Most recently it was around 1.57 percent, while the futures contract for ten-year Treasuries (T-Note Future) fell 0.04 percent to 132.24 points. Rising interest rates are an expression of growth optimism and fears of inflation. Both go back to the very loose financial policy of the new US administration, which is aiming for a trillion dollar economic stimulus package. However, when interest rates rise, bonds will again become an alternative for equity investors. The rise in interest rates had slowed the stock exchanges, sometimes strongly, over and over again in the past few days.
The better economic data turned out, the greater the doubts of the financial markets about a continued expansionary monetary policy, said economist Thomas Gitzel from VP Bank. However, the labor market still lacked millions of jobs until normality could be spoken of again, according to Helaba. The US Federal Reserve has repeatedly affirmed that the labor market is still showing weaknesses, according to the economists. This means that nothing will change in the expansionary monetary policy for the time being.
In the Dow, Cisco were way ahead with a plus of 3.8 percent. The US bank JPMorgan had upgraded the paper of the network specialist from “neutral” to “overweight”. Corporate spending on IT recovered faster than expected, Cisco is on the right track with the switch to rental software and the shares are still undervalued in an industry comparison, analyst Samik Chatterjee justified his revaluation.
The shares of the software company Oracle and the specialist for data storage solutions Western Digital also gained significantly after upgrading by analysts, each by around seven percent.
Oil prices rose sharply again. The oil network Opec + initially did not increase its production and thus caused a surprise on the markets. The shareholders of oil companies were pleased about this, because their prices also increased significantly. Chevron gained 4.3 percent as the top value in the Dow, Occidental Petroleum and ConocoPhillips in the S&P 500 up to five percent.
The euro last cost 1.1916 US dollars. In European trading, it had fallen below $ 1.19 for the first time in three months. The European Central Bank (ECB) had set the reference rate at 1.1938 (Thursday: 1.2034) dollars, the dollar thus cost 0.8377 (0.8310) euros./ajx/he
By Achim Jüngling, dpa-AFX
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