Stocks Finish on Jobs High Note Ahead of Holiday
NEW YORK ( TheStreet) -- Major U.S. stock averages reversed earlier losses to finish higher Wednesday as growing optimism about the jobs market offset a spike in oil prices prompted by political turmoil in Egypt and discouraging economic headlines in China.
The gain in stock prices just before the holiday fits an historic pattern, Mark Newton, chief technical analyst at Greywolf Execution in New York, wrote in an investor ntoe.
Over the last 30 years, stock indices embraced a slightly more positive tone ahead of holidays, followed by more negative action the day after a stretch of widely taken vacations. Newton added that while in the S&P has found meaningful resistance in each of the last four days from 1614 to 1620, it has also failed to make meaningful progress on the downside. Therefore he was expecting prices to yet again rise to challenge the 1614 to 1620 area before stalling and pulling back yet again.
Stocks gained on a raft of encouraging U.S. labor market data ahead of the widely-watched U.S. government non-farm payrolls report due Friday.
Private sector employment in the U.S. increased by a greater-than-expected 188,000 jobs in June from May after the month's job gains were revised downward to 134,000, according to the ADP National Employment Report. Economists on average were expecting June gains of 160,000.
The Labor Department reported that weekly initial jobless claims for the week ending June 29 fell 5,000 to 343,000, which was better than expected. Economists were expecting them to come in at 345,000. The four-week moving average was 345,500, a decrease of 750 from the previous week's average of 346,250.
Continuing claims for the week ending June 22 decreased by 54,000 to 2.933 million, also better than expected. Economists were predicting continuing claims of 2.953 million.
Meanwhile, employment in the U.S. service sector strengthened in June even as the overall economy appears to have slowed, the Institute for Supply Management, a not-for-profit industry association, said on Wednesday.
Robert Half International
Staffing agencies tumbled Wednesday after the White House announced a healthcare mandate aimed at employers will be postponed. Robert Half International