Wall St rises on Amazon boost, US jobs growth remains moderate

Traders work on the floor of the NYSE in New York

Traders work on the floor of the New York Stock Exchange (NYSE) in New York City, U.S., July 26, 2023. REUTERS/Brendan McDermid/File Photo

  • U.S. jobs growth remains moderate in July
  • IPhone sales slump weighs on Apple
  • Amazon sees bright Q3 on resilient cloud sales, shopping trends
  • Indexes up: Dow 0.35%, S&P 0.57%, Nasdaq 0.93%

Aug 4 (Reuters) – Wall Street rose on Friday after data showed the U.S. economy added fewer-than-expected jobs in July, while Amazon’s better-than-expected earnings countered Apple’s tepid sales forecast.

Nonfarm payrolls increased by 187,000 jobs last month, Labor Department data showed. Data for June was revised lower to 185,000 jobs added instead of the previously reported 209,000.

Reuters Graphics

Average hourly earnings grew 0.4% in July, unchanged from the previous month but a tad higher than expectations, spurring worries of more interest rate hikes before the end of 2023. That kept the year-on-year increase in wages at 4.4%.

“Below consensus job growth, combined with higher average hourly earnings signals that more progress is needed to reduce the jobs-workers gap, slow wage growth and ultimately lower inflation,” said Candice Tse, global head of strategic advisory solutions at Goldman Sachs.

“The Fed has likely ended its most aggressive tightening campaign in generations, with a reasonable path to a soft landing.”

Meanwhile, Amazon.com shares (AMZN.O) surged 9.4% after the company issued an upbeat outlook for the third quarter. Apple’s shares (AAPL.O) shed 2.7% as the iPhone maker forecast a continued slide in sales.

Shares of peers Microsoft (MSFT.O), Alphabet (GOOGL.O) and Snowflake (SNOW.N) rose between 2.1% and 5.4% after Amazon’s cloud business segment beat sales estimates.

A Labor Department report on Thursday showed the number of Americans filing new claims for unemployment benefits increased slightly last week, while layoffs dropped to an 11-month low in July.

The yield on the 10-year benchmark note dipped on Friday after the latest jobs data but hovered near the nine-month high it hit, partly due to Fitch downgrading the United States from a AAA rating to AA+ earlier this week.

At 09:36 a.m. ET, the Dow Jones Industrial Average (.DJI) was up 122.46 points, or 0.35%, at 35,338.35, the S&P 500 (.SPX) was up 25.53 points, or 0.57%, at 4,527.42, and the Nasdaq Composite (.IXIC) was up 129.63 points, or 0.93%, at 14,089.34.

Stocks closed marginally lower on Thursday weighed down by the last batch of economic data and disappointing earnings.

Of the 392 companies in the S&P 500 that have reported quarterly earnings as of Thursday, 79.3% have beat analysts’ estimates, according to Refinitiv data.

Shares of Tupperware (TUP.N), known for its plastic airtight storage containers and bowls, rallied 43.8% on Friday after it finalized an agreement with its lenders to restructure its debt obligations in an effort to turn around its business.

Amgen (AMGN.O) gained 3.8% after it reported a higher quarterly profit on strong sales of its cholesterol, osteoporosis and other drugs.

Sports-betting firm DraftKings’ (DKNG.O) shares surged 12.7% after it raised its fiscal year 2023 revenue outlook.

Meanwhile, two measures of corporate and economic health were flashing red as shipping group Maersk reported a fall in global demand for sea containers and advertising giant WPP said clients in the U.S. tech sector were slashing their marketing spend.

Advancing issues outnumbered decliners for a 2.19-to-1 ratio on the NYSE and a 1.73-to-1 ratio on the Nasdaq.

The S&P index recorded 11 new 52-week highs and three new lows, while the Nasdaq recorded 23 new highs and 19 new lows.

Reporting by Shubham Batra and Bansari Mayur Kamdar in Bengaluru; Editing by Savio D’Souza and Shounak Dasgupta

Our Standards: The Thomson Reuters Trust Principles.

Bansari reports on the global financial markets and writes Reuters’ daily flagship market reports on equities, bonds and currencies. An economist by training and winner of the Arthur MacEwan Award for Excellence in Political Economy, she has written for renowned global papers and magazines including The Diplomat, Boston Globe, Conversation, Huffington Post and more.

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