Wall St ends up sharply with Apple; jobs data suggests strength

It was a big shot straight up from the open with the Dow gaining 546 points on the strength of an ebullient Q1 from Apple and a jobs report showing solid growth and good evidence that labor remains resilient despite the rate hikes.  As today’s expert put it, “The state of the U.S. economy is in a better position than previously expected.”  The regional banks also rebounded.  The good news once again boosted Q1 earnings decline estimates today to just 0.7% vs 5.1% a month ago. Who knows? Maybe this time next week it’ll actually be in positive territory again.  Volume was a tad below average at just under 10.6 billion. 

Fri May 5, 2023  4:32 PM

Wall St ends up sharply with Apple; jobs data suggests strength

By Caroline Valetkevitch

DJ: 33,127.74  -286.50         NAS: 11,966.40  -58.93        S&P: 4,061.22  -29.53      5/4

DJ: 33,674.38  +546.64        NAS: 12,235.41  +269.01     S&P: 4,136.25  +75.03     5/5

May 5 (Reuters) - U.S. stocks closed sharply higher on Friday, with shares of Apple Inc rallying after upbeat results, while U.S. jobs data pointed to a resilient labor market.  Apple's (AAPL.O) quarterly results also cheered investors worried about a potential recession. The iPhone maker's shares were the biggest positive influence on all three major U.S. stock indexes.  The U.S. Labor Department report showed job growth accelerated in April and wage gains increased solidly, suggesting the labor market has stayed strong despite recent interest rate hikes from the Federal Reserve.

With the jobs report, "it's about the state of the U.S. economy, and what we saw today suggests it's in a better position than previously expected," said Kristina Hooper, chief global market Strategist at Invesco in New York.  Investors have been worried that the rate hikes may eventually push the economy into recession.  Regional bank shares also rebounded after recent weakness tied to the collapse of First Republic Bank. PacWest Bancorp (PACW.O) rallied along with Western Alliance Bancorp. (WAL.N)

The Dow Jones Industrial Average (.DJI) rose 546.64 points, or 1.65%, to 33,674.38, the S&P 500 (.SPX) gained 75.03 points, or 1.85%, to 4,136.25 and the Nasdaq Composite (.IXIC) added 269.02 points, or 2.25%, to 12,235.41.

On Wednesday, the U.S. central bank raised rates by 25 basis points as expected, but Fed Chair Jerome Powell noted it was too early to say with certainty that the rate-hike cycle was over as inflation remains the chief concern.  Apple drove gains in other tech shares, but all 11 major S&P sectors were higher on the day.

The estimated decline in first-quarter S&P 500 earnings has been getting smaller since the start of the reporting season and is now at just 0.7% year-over-year, Refinitiv data showed on Friday. 

Volume on U.S. exchanges was 10.57 billion shares, compared with the 10.70 billion average for the full session over the last 20 trading days.

Advancing issues outnumbered declining ones on the NYSE by a 4.95-to-1 ratio; on Nasdaq, a 2.75-to-1 ratio favored advancers.  The S&P 500 posted 13 new 52-week highs and 3 new lows; the Nasdaq Composite recorded 87 new highs and 104 new lows.