Jobs Report: Why Does It Matter?

Jobs Report: Why Does It Matter?

The jobs report is extremely important, especially now, because in October 2009, the unemployment rate surged to a 26-year high of 10.2%! Over the past few months, the number of job losses have steadily declined as the unemployment rate edged higher. If this trend continues we can easily turn positive (i.e. start creating jobs) in the near future which will bode well for the economic recovery. That said, Wall Street watches this report very closely because a stronger jobs picture translates into a healthier economy. A healthier economy translates into stronger sales and earnings which, in turn, translates into higher stock prices. Sometimes, ladies and gentlemen, it is that simple.

Stocks Negatively Reverse After Encountering Resistance

Stocks Negatively Reverse After Encountering Resistance

The major averages negatively reversed (opened higher and closed lower) after a the European Central Bank (ECB) held rates steady and disappointing economic data was released. Volume, an important indicator of institutional sponsorship, was mixed compared to Wednesday’s levels; higher on the NYSE and lower on the Nasdaq exchange. As a result, the NYSE indexes marked a distribution day as they fell on higher volume but the Nasdaq avoided one since volume receded.