Here's Where Markets Stand.
Small, steady gains pushed markets to end most sessions this week at new records. The S&P 500 was up 1.2% since Monday and secured closing records for four of the past five days. The S&P's last all-time closing high, set on Thursday, Oct. 5, marked its longest record-breaking stretch in two decades.
The Dow Jones Industrial Average ended with weekly gains of 1.6%. It had also closed at records for every day this week, bar one. A weak jobs report and a slump in crude oil on Friday, Oct. 6, stopped short the upward momentum that characterized trading from Monday through Thursday.
The Nasdaq ended Friday at another high, the only benchmark index to score a perfect streak of records this week. The Nasdaq jumped 1.45% for the week.
Gains were also helped along by record-low volatility. The CBOE Volatility Index, otherwise known as the 'fear index,' declined by 4% to 9.19 on Thursday, its lowest closing level ever.
Jobs Report Shocker
Economic disruptions caused by a string of hurricanes hit the labor market hard in September. The U.S. nonfarm payrolls report showed its first contraction in seven years, a result of Hurricane Harvey and Irma that hit Texas and Florida, respectively. The U.S. economy lost 33,000 jobs in September, shocking economists looking for 85,000 jobs to have been added.
Almost 3% of employed workers nationwide said they had not been able to work or had worked fewer hours in September because of bad weather, a record high for the measure. Leisure and hospitality jobs saw a sharp decline.
Previous months' headline jobs numbers were revised. The August job increase was bumped up to 169,000 from 156,000. The July job increase was cut to 138,000 from 189,000.
In more positive news, the unemployment rate declined to 4.2% from 4.4%, its lowest level since December 2000. Wages increased by 0.5% to an average $26.55 an hour. Hourly wages rose by 2.9% year over year.
"Obviously, the jobs number, which was heavily impacted by last month's hurricanes, is far below expectations, but early indications are the market may focus on other positive core components of the report such as the drop in the unemployment rate and the increase in wages," said Tony Bedikian, head of global markets at Citizens Bank.
Weekly jobless claims in the U.S. saw a sharp decline in the past week, according to the Labor Department. The number of new claims for unemployment benefits fell by 12,000 to 260,000. The less volatile four-week claims average dropped 9,500 to 268,250.
Claims in recent weeks have shown the initial impact of hurricanes Harvey, Irma and Maria. The number of new applications for unemployment benefits had seen an uptick.
Las Vegas Horror
Americans started the week in mourning after a mass shooting in Las Vegas on Sunday evening. The attack, in which a gunman opened fire on a music festival from the 32nd floor of the Mandalay Bay Hotel and Casino late Sunday, Oct. 1, left 59 dead and 527 injured.
The gunman was identified as Stephen Craig Paddock, 64 years old, of Mesquite, Nevada, and authorities found 23 guns in the room where his body was discovered.
The mass shooting has also revived talk of gun control in Washington, D.C. Some Republican lawmakers have said they would consider banning bump stocks, a device used in the attack that amplified how many rounds per minute the gunman could shoot.
Dismal Week for Crude
Crude oil ended the week lower as Tropical Storm Nate barreled toward the Gulf of Mexico, potentially disrupting energy production in the region. Like Harvey, shutdowns to refineries in the area could cause a backlog in crude inventories.
Meanwhile, a weekly reading on drilling activity in the U.S. showed a decline in the number of active rigs. The number of active oil rigs fell by two to 748, Baker Hughes reported. The total number of active drilling rigs declined by four to 936.
A reading on inventories earlier in the week showed a steeper decline in stockpiles in the past week as refineries continue to work through the buildup caused by Hurricane Harvey. Crude inventories fell by six million barrels in the past week, according to the Energy Information Administration, far steeper than an expected decrease of 800,000 barrels. Gasoline stockpiles increased by 1.6 million barrels, while distillates fell by 2.6 million.
A number of refineries in the Texas and Louisiana region were shuttered in the immediate aftermath in early September, causing crude stockpiles to spike.
West Texas Intermediate ended the week 4.6% lower after dropping roughly 3% on Friday.
Drip-Drip of Earnings
The third-quarter earnings season does not really kick into gear until mid-October, but already investors are getting the chance to sift through a number of performance reports.
Costco Wholesale Corp. (COST) exceeded expectations, but a decline in gross margins did cause concern as competition heats up in the grocery-store space. Margins dropped by 15 basis points. Sales were still strong, though. For the full year, sales increased 9%, while same-store sales rose nearly 4%.
Constellation Brands Inc. (STZ) topped second-quarter earnings estimates. Net income rose to $2.48 a share from $1.75 a year earlier. Adjusted earnings of $2.47 a share, higher than an estimated $2.17 a share. Net sales of $2.08 billion also came in higher than anticipated. Strong beer sales offset weaker wine and spirits sales.
PepsiCo Inc. (PEP) reported a mixed third quarter. Earnings of $1.48 a share came in a nickel ahead of consensus. Revenue climbed 1.3% to $16.24 billion, but missed estimates by $70 million. Organic revenue increased 1.3%. By segment, Frito-Lay America revenue increased 3%, Quaker Foods North America 1%, and Latin America 6%. North America beverages dropped 3%.
Monsanto Co. (MON) exceeded quarterly estimates on its top- and bottom-line. The agricultural chemicals company reported surprise adjusted profit of 20 cents a share, far better than an expected per-share loss of 41 cents. Revenue increased 5.1% to $2.69 billion, beating consensus by $160 million. Its merger with Bayer is scheduled to be completed early next year.
Lennar Corp. (LEN) reported better-than-expected third-quarter results. The homebuilder reported profit of $1.06 a share, up a nickel from a year earlier. Analysts anticipated earnings of a $1. Revenue of $3.26 billion came in higher than $3.24 billion consensus. Housing sales rose 17%, and home deliveries increased 12%.