Markets closed mixed on Wall Street today: Dow +0.53, S&P -0.07%, Nasdaq -0.94%, Oil +0.51%, Gold +0.22%.
Today’s markets were mixed because:
1) Jobs report. This morning’s Labor Department report showed the U.S. economy adding 117,000 jobs in July, well above projections of 75,000 and enough to push down the unemployment rate from 9.2% to 9.1%. The report follows yesterday’s news that initial unemployment claims in the last week of July fell to 400,000, continuing a downward trend. However, the news proved unable to prop up the markets, which quickly began to sell-off.
2) Italy. The euro gained on news that Italy will speed up its fiscal reform consolidation program, which will include a balanced budget rule, and the Dow followed, rising as high as 1.01% in a mid-day rally. Furthermore, the European Central Bank agreed to buy Italian debt if the country’s government could expedite the institution of its reform program, and reports have the ECB potentially buying Spanish bonds as well. The news takes a lot of pressure off the two largest at-risk economies in the euro zone.
3) Uncertainty. It certainly has been a volatile day of trading, with markets starting high, falling quickly, then reversing a few more times to end the day relatively flat. With big earners like Kraft (NYSE:KFT) and Procter & Gamble (NYSE:PG) propping up the Dow while financials like Bank of America (NYSE:BAC) and JPMorgan (NYSE:JPM) pulled back, the markets continually flip-flopped faster than you can say ‘recession’. It was as if investors were uncertain as to how to interpret the day’s economic news, or maybe it was just that they began focusing on the individual merits of different stocks rather than the broader economic data that so often turns out to be misleading.