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NEW YORK (dpa-AFX) – A surprisingly strong US job market report only briefly weighed on Wall Street on Friday. After initially significant losses, the most important indices recovered quickly. The Dow Jones Industrial (Dow Jones 30 Industrial) even turned positive, closing 0.23 percent higher at 32,803.47 points. After the strongest July in twelve years, in which the best-known Wall Street index rose by almost seven percent, it was stable in the first week of August.
In view of the surprisingly good labor market data, investors fear further aggressive interest rate hikes by the Fed, especially since wage increases in July did not slow down as hoped. On the other hand, however, the data fuel the hope that the world’s largest economy will not slip into recession in the coming months.
The market-wide S&P 500 fell 0.16 percent on Friday to 4145.19 points. The NASDAQ 100 fell 0.78 percent to 13,207.69 points. However, it was up 13 percent in July and extended gains by 2.0 percent in the first week of August.
In July, the US economy created significantly more jobs than expected. In addition, the increase in employment in the two previous months was revised upwards. During the Corona crisis, the labor market collapsed dramatically at times. It has now recovered significantly and companies are complaining about a shortage of workers. Wages also rose slightly more than expected, while the unemployment rate returned to pre-coronavirus levels.
Bank stocks were particularly in demand after the job market report and the associated expectations of further significant rate hikes by the Fed. JPMorgan (JPMorgan ChaseCo) gained three and Bank of America a good one and a half percent. The shares of Goldman Sachs and Morgan Stanley each increased by almost one percent.
The flood of numbers on the part of the companies ebbed away towards the end of the week. The shares of the biotech company Amgen, which had published its quarterly report after the market closed the day before, fell slightly. Amgen’s second-quarter revenue and earnings grew more than analysts expected, thanks to strong drug sales.
Lyft’s shares shot up more than 16 percent. The transport service provider also exceeded expectations with a record high adjusted operating quarterly result (Ebitda).
A takeover project also came into focus: The world’s largest online retailer Amazon wants to swallow the vacuum and washing robot manufacturer iRobot for a total of around 1.7 billion US dollars in cash including debt. This values iRobot at $61 per share. As a result, iRobot shares jumped 19 percent, while Amazon’s fell a good 1 percent.
Teva (Teva Pharmaceutical Industries) gained more than five and a half percent on positive analyst comment from Bank of America. On the one hand, analyst Jason Gerberry referred to the relative valuation of the pharmaceutical stock and sees price drivers after the announcement of the opioid comparison by the group. Teva is making significant progress on the litigation. This, combined with a solid new product cycle for 2023 and 2024, should be enough for Teva to return to operating earnings growth, he says.
The euro came under pressure after jobs data, closing at $1.0178 on Wall Street. The European Central Bank set the reference rate at 1.0233 (Thursday: 1.0181) dollars. The dollar thus cost 0.9772 (0.9822) euros.
On the bond market, the prices of US government bonds fell significantly. The futures contract for ten-year Treasuries (T-Note Future) recently fell by 1.06 percent to 119.45 points. In return, the yield on ten-year government bonds rose to 2.84 percent./ck/he
— By Claudia Müller, dpa-AFX —