Stocks Ends High Reacting to Positive Job Figures

After the release of private sector hiring statistics, investors reacted positively by pouring in money into the market. Stocks, on Wednesday, closed on a higher quote.

Dow Jones Industrial Average increased by 44 points or 0.4%. S&P 500 index also gained 0.6 % by climbing 7 points. And NASDAQ added 0.9% or 20 points.

The major reason of rise was surprising improvement in private sector payroll statistics. People are now awaiting a major report to be released by Labor Department on Friday. Besides, the industry report says there has been growth in the service sector for the seventh month in a row now.

The pace of employment and recovery is modest. However, we are sure of one thing: at least the pace is being maintained.

Corporate companies have been showing a decent profit for two months, and it is helping the economy to relocate its position to a better place. However, weak job market is still a concern. If not improvement is seen in employment rate, the consumer confidence level would fall and recovery would be severely hurt.

Chief Market Strategist of Miller Taback & Co, Peter Boockvar says the economy is not collapsing, but it’s not growing with acceptable pace either.

Investors will have a better view of the picture when government will release another job data report before market opening hours on Thursday. The report will also talk about employment trend in retail sector, which will certainly affect retail stocks in days to come.

There was an increase of 42,000 jobs in private sector companies in the month of June. However, the market is far from being stable as many companies still continue to lay off people in order to recover from the loss. Besides, there have been planned job cuts in public and non-profit sectors as well.

Overall, there has been a sharp cut in payroll this year, and the unemployment rate has ticked up a bit, which is certainly not a good sign for the country.