Friday’s Mid-Day Movers: 3 Stories Driving Markets

The markets rallied on Friday, spurred by improvements in labor-market conditions and a generally positive earnings season. The Dow Jones Industrial Average broke 15,000 for the first time, led by Caterpillar (NYSE:CAT), which was up about 3.3 percent in early-afternoon trading.

Dow Jones Industrial Average Index Chart - Yahoo! Finance

At 12:30 p.m.:

DJIA: +1.05% to 14,987.80 S&P 500: +1.14% to 1,615.83 NASDAQ: +1.33% to 3,385.18
Gold: +$0.10 to $1,467.70 per ounce Oil: +$1.76 to $95.75 per barrel U.S. 10-Year: +0.103 points to 1.703%
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Here are three stories helping shape the markets on Friday afternoon:

1) Unemployment’s Down, But Is It Enough? Payroll processor ADP’s national employment reported showed Wednesday that employers added a disappointing number of new jobs to their payrolls in April. But data supplied Thursday by the outplacement consultancy firm Challenger, Gray & Christmas support a slightly different conclusion; job cuts fell to their lowest level since December last month and hit a level consistent with pre-recession conditions. Adding to that stronger picture of the labor market was the Labor Department’s Thursday announcement that initial claims for unemployment benefits fell to the lowest level reported in the past five years.

There is even more solid evidence that the labor market is moving away from recent weakness. On Friday, the Labor Department’s Bureau of Labor Statistics released its monthly Employment Situation report showing that the United States economy had created 165,000 jobs in April, slightly lowering the unemployment rate from 7.6 percent to 7.5 percent — a four-year low. Last month’s job growth also represented a significant improvement from March’s anemic payroll gain of an upwardly revised 138,000… (Read more.)

2) Are Falling Factory Orders a Bad Economic Omen? Economic indicators gave a mixed view on the health of the United States economy on Friday. Orders placed with U.S. factories fell more than forecast in March as the slumping economy weakened demand for metals, mining equipment, and military goods.

March’s 4 percent drop in bookings was the largest decrease since August, according to the Commerce Department. Following the previous month’s downwardly revised 1.9 percent gain, the data indicated that companies are beginning to feel the effects of slowing growth in Europe, Asia, and the United States. As economists forewarned earlier in the year, the biggest restraint on growth has been the massive, across-the-board government spending cuts implemented in March after Congress failed to reach a fiscal deal and January’s hike in payroll taxes… (Read more.)

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3) Economic Headaches: What’s Behind the Second-Quarter Slowdown? The Institute for Supply Management reported on Friday that economic activity in the non-manufacturing sector grew for the 40th consecutive month in April. The NMI registered 53.1 percent, a 1.3 percentage point decline from March but still above the dividing line between growth and contraction, drawn at 50 percent.

ISM surveys more than 375 firms across the United States to compile the index, which consists of four equally-weighted components: business activity, new orders, employment, and supplier deliveries. Of these components, supplier delivery times experienced the biggest decline, losing 2.0 points to land at 51.0 percent in April. Keep in mind that slower delivery times are actually a positive economic indicator, because it suggests that demand is up… (Read more.)

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