Dow Jones Reverses Higher After June Jobs Report Beats Expectations; Managed Care Stocks Lead Market

The Dow Jones Industrial Average reversed higher following the better-than-expected June jobs report from the Labor Department Friday morning. The S&P 500 erased losses, and the Nasdaq composite also reversed higher.

X

The Dow Jones industrials rose 0.2% after being down a similar percentage. The S&P 500 erased losses, while the Nasdaq went from a 0.6% decline to a 0.1% gain. The tech-heavy index is testing resistance at the 50-day moving average.

Small caps struggled, with the Russell 2000 down 0.4%. Volume was lower on the Nasdaq and on the NYSE vs. the same time on Thursday.

Meanwhile, U.S. crude oil rose 1.6% to above $104 a barrel, after steep losses this week brought the commodity below $100 a barrel for the first time since May.

June Jobs Report Beats Expectations

Early Friday, the market saw payrolls for the month of June rise by 372,000. This reflects a slightly slower pace of hiring from May's revised increase of 384,000. But still, the June jobs report came in above the expected rise of 268,000. The unemployment rate held steady at 3.6% for the fourth-straight month.

"You can put away your recession alarm bells. The U.S. labor market is still very strong. Job growth continues to be robust and joblessness remains low," said Indeed's Economic Research Director Nick Bunker on the jobs report. "And yes, some indicators show a contraction in employment in June. But the overwhelming signal is that the labor market continues to power forward."

However, BMO's Senior Economist Sal Guatieri has a more cautious view of the jobs report. "For now, today's report will only embolden the Fed to hike rates by another 75 (basis points) later this month," he said. "Despite the positive payrolls surprise in June, the labor market is likely losing steam, with jobless claims tracking steadily higher."

Technology Stocks Lead Downside

U.S. Stock Market Today Overview
Index	Symbol	Price	Gain/Loss	% Change
Dow Jones	(0DJIA)	31476.74	+92.19	+0.29
S&P 500	(0S&P5)	3908.71	+6.09	+0.16
Nasdaq	(0NDQC )	11635.99	+14.64	+0.13
Russell 2000	(IWM)	176.38	+0.77	+0.44
IBD 50	(FFTY)	27.37	+0.12	+0.44
Last Update: 10:40 AM ET 7/8/2022

Technology stocks led the downside among S&P 500 sectors early Friday. The Technology Select Sector SPDR (XLK) fell 1%. Also leading the downside were the communication services and materials sectors. Consumer staples and materials stocks outperformed.

Leading the downside among Dow Jones stocks on Friday were Walt Disney (DIS), Microsoft (MSFT) and Salesforce.com (CRM). Microsoft is testing its 50-day moving average. Salesforce is also showing similar action as it moves back toward its recently-reclaimed 50-day and 21-day lines.

On the upside, recent breakout stock UnitedHealth (UNH) led the upside with gains of 1%. Shares continue to rise above a 507.35 buy point from a double-bottom base. This morning, the stock topped the 518.80 buy point of a handle.

Outside Dow Jones: Stocks To Watch

As health care stocks continue to outperform, Centene (CNC) scored a breakout early Friday from a double-bottom base. The stock moved above an 87.44 buy point in stronger-than-normal volume. Shares rose 3%. The stock's relative strength line isn't at a new high but remains near recent highs.

The stock is part of the managed care industry group, alongside UnitedHealth, and the group itself ranks No. 12 out of IBD's 197 groups. This shows relative strength. Centene remains inside the 5% buy zone, which tops out at 91.81.

Over in the IBD 50, another health care stock, Humana (HUM), led the upside with gains of 1.8%. Shares moved further into a buy zone from a recent 475.54 buy point. The stock initially broke out on June 28, and has drifted higher since then. The stock also topped another buy point at 469.44.

Other stocks leading the upside in the IBD 50 on Friday included United Therapeutics (UTHR) and Flowers Food (FLO).

Follow Rachel Fox on Twitter at @IBD_RFox for more Dow Jones and stock market commentary.