The Dow Jones New York Stock Exchange closed more than 2% higher on Friday (January 6) in response to its nonfarm payrolls report. Including the US service sector index. This indicates that inflation has passed its peak. And it will be a support factor for the Federal Reserve (Fed) to slow down the rate hike.
The Dow Jones Industrial Average closed at 33,630.61 points, an increase of 700.53 points or +2.13%, the S&P 500 index closed at 3,895.08 points, an increase of 86.98 points or +2.28%, and the Nasdaq index closed at 10,569.29 points, an increase of 264.05 points or +2.56%.
The Dow is up 1.46%, the S&P 500 up 1.45% and the Nasdaq up 0.98% this week.
The U.S. released higher-than-expected nonfarm payrolls on Friday. But workers’ average hourly wage This is the information the Fed pays attention to for signs of inflation. came out lower than expected This indicates that inflation has passed its peak. And it will be a factor for the Fed to slow rate hikes.
Meanwhile, the US Institute for Supply Management (ISM) said. The US service sector index contracted for the first time in more than two years, a sign that the Fed’s interest rate hikes have cooled the US economy.
The ISM said services prices fell to 67.6, the lowest level since January. 2021, which indicates a slowdown in inflation.
The US Department of Labor said on Friday Nonfarm payrolls increased by 223,000 in December. The unemployment rate fell to 3.5%, below analysts’ estimate of 3.7%, while workers’ average hourly wages increased 0.3% month-on-month. That slowed from 0.6% in November and fell short of analyst expectations by 0.4% year over year. Average hourly earnings for workers rose 4.6% in December, below analyst expectations of 5.0%.
The US ISM services index fell to 49.6 in December, below analysts’ expectations of 55.0 from 56.5 in November. It was the first contraction since May. 2020, while the services price index fell to 67.6, the lowest level since January 2021. and indicates a slowdown in inflation.
The ISM Services Index comprises 17 industry segments, including real estate, transportation, construction and mining.
All S&P 500 stocks closed higher, with leading materials gaining 3.44%, followed by interest-sensitive technology gaining 2.99%, energy stocks gaining 1.68%. % and healthcare which gained 0.89%.
Consumer goods inventories were buoyed by Costco Wholesale Corp shares, which rose 7% after Costco posted strong sales growth in December.
Biogen shares closed 2.8% higher after the US Food and Drug Administration (FDA) approved lecanemab, an Alzheimer’s drug developed by Biogen in collaboration with the company A. Eisai, whose price of shares closed up 4%.
Pfizer shares rose 2.5% after Pfizer reportedly negotiated with the Chinese government to obtain a license for the Chinese pharmaceutical company to manufacture and sell Paxlovid, the anti-COVID-19 drug.
Shares of Bed, Bath & Beyond fell 22% in the opposite direction after Reuters news agency reported that the home goods retailer is set to file for bankruptcy protection in the coming weeks.
next week Investors will watch Friday’s fourth-quarter 2022 earnings releases from the largest U.S. bank. These include JPMorgan and Bank of America.
