S&P 500 and Nasdaq Trade at New Highs after Labor Market Bounces Back Following Storms and Strikes

Barry Adams
06 Dec, 2024
New York City

Wall Street indexes moved in a tight range in early trading on Friday after November's payrolls report confirmed tight labor market conditions. 

The S&P 500 index increased 0.2%, and the Nasdaq Composite advanced a fraction after nonfarm payrolls increase rebounded from the anemic increase of 12,000. 

Nonfarm payrolls in November jumped by 227,000 from the upwardly revised 32,000 in October, the U.S. Bureau of Labor Statistics reported Friday. 

The closely watched labor market confirmed the sustained hiring in healthcare, leisure and hospitality, government, and social assistance. 

Employment increased in transportation equipment manufacturing, reflecting the return of workers who were on strike; however, retail trade lost jobs. 

Employment growth in the previous month was negatively impacted by the Boeing strike and two back-to-back hurricanes, Helene and Milton, spanning several states in the South. 

Over the past 12 months, the U.S. economy added 186,000 jobs per month. 

Both the unemployment rate, at 4.2%, and the number of unemployed people, at 7.1 million, changed little in November. 

These measures are higher than a year earlier, when the jobless rate was 3.7% and the number of unemployed people was 6.3 million.

The average hourly earnings for all employees increased 13 cents, or 0.4%, to $35.61, extending the annual increase over the last 12 months to 4.0%. 

Wage inflation is critically watched by the Fed's policymakers, as the rise in wages contributes to higher overall inflation in the following months. 

 

U.S. Indexes and Treasury Yields

The S&P 500 index increased 0.4% to 6,097.48, the Nasdaq Composite rose 0.6% to 19,822.90, and the Russell 2000 index advanced by 0.7% to 2,414.06. 

The yield on 2-year Treasury notes edged lower to 4.09%, 10-year Treasury notes inched down to 4.13%, and 30-year Treasury bonds decreased to 4.30%.

WTI crude oil decreased $0.81 to $67.41 a barrel, and natural gas prices edged down 4 cents to $3.03 a thermal unit.

Gold increased by $2.70 to $2,636.43 an ounce, and silver fell by $0.28 to $31.06. 

The dollar index, which weighs the US currency against a basket of foreign currencies, edged higher by 0.09 to 105.80.

 

Stock Movers 

Ulta Beauty Inc. surged 9.3% to $429.0 after the cosmetic retailer reported better-than-expected results in the fiscal third quarter. 

Revenue increased to $2.53 billion from $2.49 billion, net income dropped to $242.2 million from $249.5 million, and diluted earnings per share rose to $5.14 from $5.07 a year earlier. 

Comparable same-store sales growth slowed to 0.6% from 4.5% in the quarter a year ago. 

During the third quarter of fiscal 2024, the retailer repurchased 731,458 shares of its common stock at a cost of $267 million. 

During the first nine months of fiscal year 2024, the company repurchased 1.9 million shares of its common stock at a cost of $764.5 million. 

As of November 2, $2.9 billion remained available under the $3 billion share repurchase program announced in October 2024.

Lululemon Athletica Inc. increased 8.5% to $373.80, and the athleisure apparel retailer reported better-than-expected quarterly earnings. 

Revenue in the fiscal third quarter ending in October increased 9% to $2.4 billion, net income soared to $351.9 million from $248.7 million, and diluted earnings per share advanced to $2.87 from $1.96 a year ago. 

For the fourth quarter of 2024, the retailer estimated net revenue to be in the range of $3.475 billion to $3.510 billion, representing growth of 8% to 10%, or 3% to 4% excluding the 53rd week of 2024. 

Diluted earnings per share are expected to be in the range of $5.56 to $5.64 for the quarter, assuming a tax rate of approximately 29.5%.

For full-year 2024, the company now expects net revenue to be in the range of $10.452 billion to $10.487 billion, representing growth of 9%, or 7% excluding the 53rd week of 2024. 

Diluted earnings per share are now expected to be in the range of $14.08 to $14.16 for the year, assuming a tax rate of approximately 30%.

GitLab Inc. jumped 12.7% to $74.25, and the developer software tools company reported better-than-expected adjusted earnings and announced the appointment of a new chief executive effective today. 

Revenue in the fiscal third quarter ending in October soared 31% to $196 million from $149.7 million, net income swung to a profit of $29.6 million from a loss of $285.2 million, and diluted earnings per share were 18 cents compared to a loss of $1.84 a year earlier. 

The company guided revenue in the fiscal fourth quarter to range between $205 million and $206 million and adjusted earnings per share between 22 cents and 23 cents. 

The company named Bill Staples as new chief executive, succeeding CEO and co-founder Sid Sijbrandij, "who is stepping down from day-to-day activities to focus on his health."