Stock market's spotlight shines on employment data

Market Snapshot for July 8, 2012 (12:32 am ET):

  • Closing Prices: DOW 12,719.49 (+93.49, +0.74%), S&P 500 1,353.22 (+14.00, +1.05%), NASDAQ 2,872.66 (+38.64, +1.36%), Nikkei 225 10,136.85 (+65.71, +0.65%), DAX 7,471.44 (+40.25, +0.54%),
  • FTSE 6,054.55 (+51.63, +0.86%)
  • OIL 98.45, GOLD 1,531.50, SILVER 36.42
  • EURO 1.4337, YEN 81.25, BRITISH POUND 1.5947, U.S. DOLLAR INDEX 75.29

Employment Reports Top Expectations

The main focus heading into Thursday's session was the kick-off of the latest round of employment data. The market has been sluggish throughout the first half of this week's shortened trading week and things were looking to remain that way until June's ADP Employment Report came out at 8:15 a.m. ET. According to the report, private sector payrolls were up 157,000 in June, which was substantially higher than the 60,000 increase that had been anticipated. The futures market had been in a holding pattern heading into the data, but took a large leap on the news ahead of the open.

The positive data continued with last week's initial jobless claims slipping from 432,000 to 418,000. Analysts were expecting a number closer to 425,000. The earlier jump on the ADP data, however, had a much larger impact and last week's report on first-time unemployment claims was virtually unnoticed. This won't be the case with Friday's data. Friday's premarket employment reports include June's nonfarm payroll, the latest unemployment rate, the average work week, and average hourly earnings. Nonfarm payrolls are expected to have increased by 100,000 in June.

Dow Jones Industrial Average (Figure 1)

Thursday's Trend Day Pushes Indices Towards Prior Highs

Thursday's jobs data gave the indices yet another push into two-year highs, although the price levels that hit heading into the beginning of May will once again be strong resistance. The market gapped higher on Thursday after the data propelled it out of its premarket trading range. The move was reminiscent of the strong 15-minute breakouts seen last week. Once of the major differences, however, was that this time around there were more clear-cut price swings intraday to lend greater favor for daytraders taking advantage of strategies on the 5-minute time frame. Another difference was that volume continued to remain on the light side like it has throughout the week so far.

S&P 500 (Figure 2)

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