The major stock market indexes closed sharply higher Friday and ended the week with gains of around 2%. The May jobs report offered a big surprise that bolstered stocks.
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The May nonfarm payrolls grew a better-than-expected 339,000 vs. the 190,000 Econoday consensus. Private payrolls increased 283,000 vs. the 165,000 expected, while manufacturing payrolls fell 2,000 vs. a 8,000 increase projected.
The unemployment rate ticked up to 3.7%, higher than the 3.5% forecast.
The U.S. Senate passed the bill to raise the debt ceiling Thursday evening, and now awaiting President Biden’s signature.
The 10-year U.S. Treasury yield added 8 basis points to 3.69%. The CME FedWatch tool shows around 75% odds for no rate hike at the June Federal Reserve meeting, and the remainder of Fed watchers expect a quarter-point rate hike.
Stock Market Rallies In Afternoon Trade
The Nasdaq gained 1.1%. The Dow Jones Industrial Average showed the most strength, rising 2.1% and reclaimed its 50-day moving average in bullish fashion. The S&P 500 rallied 1.5%.
The iShares Russell 2000 ETF (IWM) fared better than the major indexes, popping 3.6%. The Dow and Russell 2000 had their best single-day gains since November, according to Dow Jones Market Data. The Dow posted a 701-point gain for the day.
The Dow and the Nasdaq each racked up 2% weekly gains, and the S&P 500 was right behind them, with 1.8%.
The First Trust Nasdaq 100 Equal Weighted ETF (QQEW) advanced 1.1%, indicating broader participation in the rally.
The Nasdaq 100-tracking Invesco QQQ Trust ETF (QQQ) rose 0.8%. And Innovator IBD 50 ETF (FFTY) climbed 1.9%.
NYSE and Nasdaq volume fell slightly vs. the same time Thursday, in preliminary numbers.
Crude oil rallied 2.6% to $71.92 per barrel. Gold futures pulled back 1.5% and remained below the psychological $2,000-per-ounce level. The price of Bitcoin, meanwhile, edged up 1.7% to $27,375.
Stock Market Earnings Movers: MongoDB Profits Soar 180%
IBD 50 stock Broadcom (AVGO) rose 2.8% after reporting stronger-than-expected second quarter earnings and sales. It gave Q3 revenue guidance above analysts’ forecasts. Shares are in the 20% profit zone of a flat base with a 648.60 buy point.
Lululemon Athletica (LULU) gapped up 11.3% in heavy volume, after reporting higher-than-expected Q1 adjusted EPS and sales. Same-store sales grew 13% over last year. The athleisure and yoga apparel retailer’s inventories increased 24%.
Shares pulled back from larger morning gains, but are still on pace to reclaim their 50-day moving average.
IBD 50 stock MongoDB (MDB) skyrocketed 28% in strong volume after handily beating its April-ended quarter adjusted profit and revenue. It also raised its fiscal year EPS and sales forecasts. MongoDB earnings soared 180% vs. the year-ago period to 56 cents a share.
IBD 50 stock Asana (ASAN) reversed lower, dropping 2.8% in heavy volume, after reporting a smaller-than-expected loss for its April-ended quarter late Thursday.
Cloud connectivity provider Samsara (IOT) rocketed 27.9% after reporting a smaller-than-expected Q1 loss and higher revenue. The stock broke out of a base, clearing the 22.69 buy point in heavy trading.
EV charging stock ChargePoint (CHPT) fell 7% after reporting a larger than expected Q1 loss and a beat on sales late Thursday. Management gave Q2 revenue guidance below analysts’ estimates.
Breakout Movers: Cathie Wood Adds More Of This Stock
Other stock market breakouts Friday included UiPath (PATH), which topped a cup base’s 18.22 buy point. Shares gained 1.7% and are at the bottom of the 5% buy zone, which goes to 19.13.
The move came after news that Ark Invest CEO Cathie Wood sold shares of Nvidia (NVDA) and bought more PATH for her ARK Innovation ETF (ARKK). PATH is the fourth largest holding in the fund.
Extreme Networks [ticker symb=EXTR] jumped 4.9% and broke out of a saucer base with a 21.13 buy point. Shares hit an all-time high Friday. EXTR has been on an uptrend since the network software company reported better-than-expected earnings and sales and raised its June-quarter revenue guidance above analysts’ estimates on April 26.
Aehr Test Systems (AEHR) spiked 7.3% and broke out of a cup base that displays a 40.79 buy point. The move came after the semiconductor test systems maker announced that an unnamed new customer placed an order for a system that makes silicon carbide metal transistors for vehicles. Analysts expect 51% EPS growth in the fiscal year that ended in May, and an impressive 77% increase the next fiscal year.
ATI (ATI) climbed 6.9% and broke out past a trendline entry, as it decisively regained its 50-day line. The entry is around 37, and the stock is still forming a double bottom with a 39.93 entry.
The specialty metals company rose after the Senate passed the debt-ceiling bill, sparking renewed economic optimism. Separately, China is said to be working on ways to boost its property market, which could increase demand for industrial metals.
Telecom Stocks Sell Off
Telecommunications stocks took a hit after a Bloomberg report said Amazon (AMZN) is in talks with cellular providers to offer a low or no-cost mobile phone service to its U.S. Amazon Prime members. But Amazon and Verizon Communications (VZ) denied the report. T-Mobile U.S. (TMUS) reportedly also denied having talks.
AMZN jumped 1.2%, while T-Mobile gapped down 5.6%, AT&T (T) sank 3.8% and Verizon shed 3.2% on the news. Verizon is the Dow’s biggest loser today.
A Wall Street Journal article previously reported that wireless and satellite service provider Dish Network (DISH) was in talks to sell its wireless plans to Amazon. DISH catapulted 16.2% in heavy volume today.
Follow Kimberley Koenig for more stock market news on Twitter @IBD_KKoenig.
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