Closing Bell: Stocks Finish Strong as Jobs Report, Earnings Offer Boost

Stocks finished the trading week strong as investors digested employment growth, tax reform and deal chatter.

Author:: Kinsey Grant
Publish date:: Nov 3, 2017 4:38 PM EDT

Stocks finished the trading week higher after wobbling into the red earlier as earnings season lifted some and weighed on others. The Dow Jones Industrial Average was close to flat. The S&P 500 gained about 0.2%, and the Nasdaq pushed confidently higher by about 0.6%.

Shares of both Qualcomm (QCOM) - Get Report and Broadcom (AVGO) - Get Report jumped in late trading Friday after reports surfaced that a takeover could be in the works. According to people familiar with the matter, Broadcom is considering a $100 billion acquisition of Qualcomm, with $70 per share in cash and stock. If a deal were to come to fruition, it would be the biggest chipmaker takeover ever.

This morning's jobs report showed the economy rebounded some during October. Although investors appeared to be pleased overall with the 261,000 jobs added last month, wage growth remained stubbornly low. Hourly pay rose just 2.4% from last year, which was weaker than expected. The wage growth conundrum has bred concern at the Fed. While employment growth was a little lackluster, the market is still confident in a December rate hike. Fed funds futures price in a nearly 97% likelihood of a 25-basis point increase next month.

Nearly 80% of S&P 500 companies have reported third quarter earnings. The blended growth rate now stands at 5.9%, which is lower than the first half of this year but a healthy increase over last year. More than 74% of companies have beat analyst expectations reporting their financials. On average, those earnings beats come in around 5% above what was first expected.

Broadcom is a holding in Jim Cramer's Action Alerts PLUS Charitable Trust Portfolio. Want to be alerted before Cramer buys or sells AVGO? Learn more now.

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