Stock Market Today: Double Dose of Jobs Data Drives Stocks Higher

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.

"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.