Here Are 3 Hot Things to Know About Stocks Right Now
- The Dow Jones Industrial Average ended higher Friday as weak job numbers lifted hopes for a interest rate cut from the Federal Reserve.
- Zoom Video Communications (ZM) surged after posting stronger-than-expected first-quarter profit in its first-ever report as a public company. Zoom Video is Real Money's Stock of the Day.
- Beyond Meat (BYND) soared after posting a first-quarter loss narrower than analysts' expectations and revenue that topped forecasts.
Wall Street Overview
Stocks ended higher Friday as a disappointing jobs report for May raised investors' hopes that the Federal Reserve would cut interest rates.
The Dow Jones Industrial Average climbed 263 points, or 1.02%, to 25,984, the S&P 500 rose 1.05%, while Nasdaq rose 1.66%.
The Dow rose 4.7% for the week, its biggest weekly gain since November.
Nonfarm payrolls rose by 75,000 in May, down from 224,000 the prior month, the Labor Department said in its monthly employment report. Economists surveyed by FactSet had estimated a gain of 182,500, on average.
"It was fairly disappointing to be honest," David Madden, a market analyst at CMC Markets UK. "The headline number was weak, the April figure was revised lower. The jobless rate held steady, and it was a little worrying that the earnings cooled. The labor market might be tapped out, but it seems odd that wages are falling too, so the overall report is underwhelming."
Alec Young, managing director of global markets research at FTSE Russell, said that "all in all, the report is neutral for equities."
"At a time when weak global growth and trade uncertainty have investors increasingly worried about economic weakness, May's soft jobs report only fanned those fears," Young said. "The silver lining is that May's employment weakness all but ensures a Fed rate cut sooner rather than later."
The benchmark U.S. interest rate currently is set in a range from 2.25% to 2.5%, and the market for futures contracts on federal funds indicates that traders now see roughly 30% odds the Fed will reduce the range at its meeting June 18-19.
Bank of America economists said in a report Friday that it is probably too soon for the Federal Reserve to cut official U.S. interest rates to bolster economic growth, even after a Labor Department report showed that businesses slowed hiring dramatically in May.
On the trade front, President Donald Trump said on Twitter that there is "a good chance" the United States and Mexico will reach a trade agreement. Trump said Mexico may be able to avert tariffs on its goods by purchasing American agricultural products.
"If we are able to make the deal with Mexico, & there is a good chance that we will, they will begin purchasing Farm & Agricultural products at very high levels, starting immediately," Trump said. "If we are unable to make the deal, Mexico will begin paying Tariffs at the 5% level on Monday!"
Trump faces a Friday deadline to sign an executive order to ensure the tariffs go into effect by Monday for Mexico to meet his immigration demands or face a 5% tariff on all exports to the U.S.
"It's a good sign that talks have not broken down," Mexican President Andres Manuel Lopez Obrador told reporters in Mexico City, according to Reuters. "There is dialogue and an agreement can be reached. I'm optimistic we can achieve that."
Lopez Obrador, however, said it was a mistake for the United States to link migration with trade.
Shares of Zoom Video Communications (ZM) lived up to the company's name, surging 18.4% to $94.05 after the web conferencing platform company posted stronger-than-expected first-quarter profit in its first-ever report as a public company. Zoom Video is Real Money's Stock of the Day.
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Caesars Entertainment (CZR - Get Report) is close to combining with rival casino operator Eldorado Resorts (ERI - Get Report) , The Wall Street Journal reported, citing people familiar with the matter. Caesars rose 3.8% to $9.48, while Eldorado Resorts advanced 4.6% to $52.06.