A pair of encouraging jobs reports helped the major indices close in the black Thursday, and drove the Nasdaq Composite to yet another record-high finish.
Early Thursday, the Labor Department reported that the U.S. added 4.8 million jobs in June to easily surpass economists' consensus expectations for 3.7 million, while the unemployment rate dropped from 13.3% to 11.1%. Meanwhile, last week's jobless claims trickled lower to 1.34 million, from 1.38 million a week prior.
"It is difficult to downplay the incoming June employment numbers, with both surveys showing sizable flows of workers returning to employment last month as states continued to remove restrictions on non-essential activity following the COVID-19 lockdowns in March and April," Barclays analysts wrote in a Thursday note.
From just $107.88 $24.99 for Kiplinger Personal Finance
Become a smarter, better informed investor. Subscribe from just $107.88 $24.99, plus get up to 4 Special Issues
Sign up for Kiplinger’s Free Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
"One thing that we are certain about," writes Rick Rieder, BlackRock's Chief Investment Officer of Global Fixed Income, "and is most relevant to markets, is that virtually all the numbers this month have displayed some tangible improvement, some clear reopening of the economy, albeit still very uneven by sector and region.
"We are confident that the industries that can be effective in a work-from-home framework and/or those that are deemed essential, such as healthcare or education, are showing tangible signs of improvement and employment durability. However, it is also clear that leisure, travel, energy, etc., are very uncertain in their path forward today."
Dow component Pfizer (PFE, +2.3%) enjoyed follow-through buying after Wednesday's encouraging COVID-19 vaccine news, and Walgreens (WBA, +2.7%) headed higher, too, helping the industrial average gain 0.4% to 25,827.
The Nasdaq climbed 0.5% to a new closing high of 10,207 on the back of a strong day for Google parent Alphabet (GOOGL, +1.9%). The S&P 500 finished with a 0.5% improvement to 3,130, and the small-cap Russell 2000 advanced 0.3% to 1,431.
And a reminder: The market will be closed tomorrow, July 3, in observance of Independence Day.
However, As Stocks Go Up, Yields Come Down
The market's torrid three-month rebound off the March bottom has been a much-needed relief for investor portfolios. But Q2's rosy rally has come with a couple of irritating thorns.
We recently explained to subscribers of our A Step Ahead e-letter that the broader stock market's valuations are back to sky-high levels. Well, the air is getting thin again for dividends, too. The S&P 500 currently yields less than 2%, and the 10-year Treasury delivers a skinflint 0.7%.
Howard Silverblatt, Senior Index Analyst for S&P Dow Jones Indices, notes that the current 12-month dividend yield is 1.925% vs. the 2.305% for March 2020. How does that shape up historically? "From December 1936 through June 2020 the average yield for the S&P 500 was 3.572%," though the figure is much more in line with the five-year average, which sits at 1.993%.
But that doesn't mean investors are entirely without interesting income options:
- These three municipal bond funds, for instance, not only yield between 3% to 5% -- but carry a tax advantage.
- You can also look to exchange-traded funds (ETFs) for significant income.
- Or, you can check out various other ways of collecting yields of up to 9%.
But among the most popular niche areas of the income market are monthly dividend stocks and funds, which … well, they do exactly what it sounds like they do. Rather than the typical U.S. equity schedule of quarterly cash distributions (or even more annoying semiannual or annual payments), these 11 monthly dividend stocks and funds deliver cash on a schedule that matches most of your regular bills.
-
5 Types of Gifts the IRS Won’t Tax: Even If They’re BigGift Tax Several categories of gifts don’t count toward annual gift tax limits. Here's what you need to know.
-
The 'Scrooge' Strategy: How to Turn Your Old Junk Into a Tax DeductionTax Deductions We break down the IRS rules for non-cash charitable contributions. Plus, here's a handy checklist before you donate to charity this year.
-
IRS Says You Made a Tax Return Mistake? A New Law Could Help You Fight BackTax Law Updated taxpayer protections change what the IRS must explain on error notices and how long you have to respond.
-
Dow Rises 497 Points on December Rate Cut: Stock Market TodayThe basic questions for market participants and policymakers remain the same after a widely expected Fed rate cut.
-
JPMorgan's Drop Drags on the Dow: Stock Market TodaySmall-cap stocks outperformed Tuesday on expectations that the Fed will cut interest rates on Wednesday.
-
Stocks Slip to Start Fed Week: Stock Market TodayWhile a rate cut is widely expected this week, uncertainty is building around the Fed's future plans for monetary policy.
-
Stocks Keep Climbing as Fed Meeting Nears: Stock Market TodayA stale inflation report and improving consumer sentiment did little to shift expectations for a rate cut next week.
-
Crypto Trends to Watch in 2026Cryptocurrency is still less than 20 years old, but it remains a fast-moving (and also maturing) market. Here are the crypto trends to watch for in 2026.
-
Small Caps Hit a New High on Rate-Cut Hope: Stock Market TodayOdds for a December rate cut remain high after the latest batch of jobs data, which helped the Russell 2000 outperform today.
-
UNH Sparks a 408-Point Surge for the Dow: Stock Market TodayThe best available data right now confirm both a slowing employment market and a December rate cut, a tension reflected at the equity index level.
-
Stocks Bounce Back With Tech-Led Gains: Stock Market TodayEarnings and guidance from tech stocks and an old-school industrial lifted all three main U.S. equity indexes back into positive territory.
