It was a dizzying end of the week for market participants. Stocks had a slow start Friday thanks to a good-news-is-bad-news jobs report. However, the main indexes eventually turned tail and rallied hard on the back of well-received earnings from a pair of Big Tech giants.
Ahead of Friday's open, the Bureau of Labor Statistics said the U.S. added 353,000 new jobs in January, blowing past the 185,000 economists were expecting. Both the unemployment rate (3.7%) and participation rate (62.5%) were unchanged vs December, while average hourly earnings were up 0.6% month-over-month and 4.5% year-over-year.
The January jobs report is "crushing all the best-laid plans for a smooth path to Fed rate relief," says Douglas Porter, chief economist at BMO Capital Markets. And while Porter is "always cautious about reading too much into January economic stats," he notes that "there is little doubt that the U.S. economy retains much more momentum than almost anyone anticipated."
Sign up for Kiplinger’s Free E-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.
And with the labor market still tight, market expectations for a March rate cut have dropped to 21% from 38% one day ago, according to CME Group's FedWatch Tool.
Meta stock booms on major dividend news
Meanwhile, Big Tech earnings gave folks plenty to buzz about too. Most notable were results from Facebook parent Meta Platforms (META). In addition to reporting higher-than-expected earnings of $5.33 per share on $40.1 billion in revenue, the company said it will start paying a quarterly dividend of 50 cents per share and increased its stock buyback program by $50 billion.
"The dividend is a very big statement," says Anthony Denier, CEO of Webull, a commission-free trading platform. "It confirms the business is a cash cow and it expresses confidence in its cash flow. Also, paying a dividend opens the stock up to a lot of new investors who only invest in dividend stocks."
Additionally, the company said it will spend up to $37 billion this year on investments aimed at boosting its tech infrastructure to support additional artificial intelligence (AI) initiatives.
These impressive results capped off what Meta CEO Mark Zuckerberg called a "year of efficiency" for the firm, which included cutting more than a fifth of its global workforce. They also sent META stock soaring 20.3% today – adding $204 billion in market value along the way. This is the biggest single-day gain in market value ever for a U.S. stock, according to Bloomberg. It's also equivalent to the entire market value of Dow Jones stock Cisco Systems (CSCO, 0.00%).
Amazon pops post-earnings
Fellow Magnificent 7 stock Amazon.com (AMZN) also popped after earnings, gaining 7.9% thanks to its top- and bottom-line beats.
Apple (AAPL), on the other hand, slipped 0.5% after its fiscal first-quarter results showed sales in China were down 13% vs the year prior. This is the only region that saw a year-over-year decline in sales.
As for the main indexes, the Nasdaq Composite closed up 1.7% at 15,628, the S&P 500 added 1.1% to 4,958, and the Dow Jones Industrial Average gained 0.4% to 38,654.
Related content
- ARK Invest's Cathie Wood is Searching for the Next Big Thing
- Finfluencers Are a Rising Trend. But Should You Trust Their Advice?
- Kiplinger's Earnings Calendar for This Week (Feb. 5-9)
-
The '8-Year Rule of Social Security' — A Retirement RuleThe '8-Year Rule of Social Security' holds that it's best to be like Ike — Eisenhower, that is. The five-star General knew a thing or two about good timing.
-
Should I Buy Stocks or Should I Buy Bonds Right Now?Generally speaking, stocks provide reasonable growth while bonds provide stable income. Each play important roles in diversified portfolios.
-
Should I Buy Stocks or Should I Buy Bonds Right Now?
Generally speaking, stocks provide reasonable growth while bonds provide stable income. Each play important roles in diversified portfolios.
-
You Were Planning to Retire This Year: Should You Go Ahead?If the economic climate is making you doubt whether you should retire this year, these three questions will help you make up your mind.
-
Are You Owed Money Thanks to the SSFA? You Might Need to Do Something to Get ItThe Social Security Fairness Act removed restrictions on benefits for people with government pensions. If you're one of them, don't leave money on the table. Here's how you can be proactive in claiming what you're due.
-
From Wills to Wishes: An Expert Guide to Your Estate Planning PlaybookConsider supplementing your traditional legal documents with this essential road map to guide your loved ones through the emotional and logistical details that will follow your loss.
-
Why Investing Abroad Could Pay OffCountries overseas are stimulating their economies, and their stocks are compelling bargains.
-
Are These the Next Stocks to Split?Interactive Brokers' recently split its stock to makes its shares more accessible to investors. Could these high-priced stocks be next?
-
Your Home + Your IRA = Your Long-Term Care SolutionIf you're worried that long-term care costs will drain your retirement savings, consider a personalized retirement plan that could solve your problem.
-
I'm a Financial Planner: Retirees Should Never Do These Four Things in a RecessionRecessions are scary business, especially for retirees. They can scare even the most prepared folks into making bad moves — like these.
