On Wall Street, stock prices rose slightly on Friday, despite better-than-expected employment data in the U.S., as investors remain cautious given that leading indices have reached their highest levels in two years.
The Dow Jones index strengthened by 9 points, or 0.08 percent, to 11,444 points, while the S&P rose by 0.39 percent to 1,225 points, and the Nasdaq index increased by 0.06 percent to 2,578 points.
In October, 151,000 new jobs were created in the U.S., marking the first increase in employment since May and double the expectations. However, the unemployment rate remained unchanged for the third consecutive month at 9.6 percent. Analysts agree that the data is encouraging as it may signal a faster recovery in the labor market, but they warn that the number of employed should increase by at least 100,000 monthly to keep pace with population growth.
Although significantly better than expected, this data failed to spur a stronger rise in stock prices as investors are cautious after a strong increase in stock prices in recent days, driven by the announcement of new measures by the U.S. central bank to stimulate the economy. Throughout this week, the S&P 500 rose by 3.6 percent, while the Dow Jones and Nasdaq indices strengthened by 2.9 percent. All three indices reached their highest levels since 2008, thanks to the introduction of a new Fed program for purchasing bonds amounting to $600 billion over the next eight months. The market was also positively influenced this week by the Republican victory in the Congressional elections, which is believed to contribute to an improved business environment.
“Good news is simply good news. The stock and commodity markets got everything they wanted this week, which is great. However, due to the strong rise in stock prices in recent days, I think a mild correction is coming. On the other hand, there is a lot of optimism in the market, and the labor market picture looks better,” says King Lip, director at Baker Avenue Asset Management.
