Reopening Trade Drives Stock Gains; Yields Tumble: Markets Wrap - Yahoo Finance

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(Bloomberg) -- Technology shares dropped, with stocks trimming most of the gains that were earlier driven by a better-than-estimated jobs report. Treasury 10-year yields sank below 1.5% for the first time in a month.

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The U.S. labor market got back on track in October, with a larger-than-forecast and broad-based payrolls gain, indicating greater progress filling millions of vacancies as the effects of the delta variant faded. Nonfarm payrolls increased 531,000 after large upward revisions to the prior two months. The unemployment rate fell to 4.6%, while the labor-force participation rate was unchanged. Average hourly earnings came in line with estimates, rising the most since February.

Reaction to jobs data:

“The strong jobs report is a welcome sign that the delta wave-driven slowdown was indeed transitory. This bodes well for the expansion, which is set to continue in the coming months, driving earnings and economically sensitive sectors higher,” said Matt Peron, director of research at Janus Henderson Investors.
“Investors are looking for a modestly growing economy as the Fed starts pulling back the reins, and the October jobs report seems to fit that bill,” said Lindsey Bell, Ally Invest’s chief markets and money strategist.
“This is the strong progress from the job market that we wanted to see. Some of the pandemic-driven headwinds preventing people from taking open jobs have started to abate, and given strong demand, we expect to see even better numbers in the months ahead,” said Jeff Buchbinder, equity strategist at LPL Financial.

President Joe Biden said Friday that the U.S. economy is recovering from the pandemic faster and stronger than expected. Biden’s speech comes with Congress grappling over his agenda -- an infrastructure bill and a broader package of social programs and tax measures. Meantime, Federal Reserve Bank of Kansas City President Esther George said bottlenecks contributing to high inflation will persist well into 2022 amid broadening price pressures, suggesting officials should not wait too long to respond.

Read: Pelosi Confronts Last-Minute Hang-Ups on Biden Agenda Votes

Some other corporate highlights:

Airbnb Inc. reported earnings that beat analysts’ estimates, proving the vacation-rental giant’s resilience even as the delta variant of Covid-19 prompted new travel concerns and restrictions.
Sports-betting company DraftKings Inc. reported third-quarter sales that missed Wall Street estimates, due in part to unfavorable NFL game outcomes.
Peloton Interactive Inc. cut its annual revenue forecast by as much as $1 billion and lowered its projections for subscribers and profit margins, underscoring the fitness company’s struggles to adjust to a post-pandemic economy.

For more market analysis, read our MLIV blog.

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