Profit Taking May Lead To Early Weakness On Wall Street

The major U.S. index futures are pointing to a lower opening on Monday following the strength that was seen last week. Profit taking may contribute to early weakness on Wall Street after the upward move last Friday lifted the Nasdaq and the S&P 500 to record closing highs.

Trading activity may be somewhat subdued, however, as a lack of major U.S. economic data may keep some traders on the sidelines.

Traders are also reacting to news of pro-European centrist Emmanuel Macron’s victory in the French presidential election over the weekend.

After showing a lack of direction in morning trading, stocks moved mostly higher over the course of the trading session on Friday. With the upward move on the day, the Nasdaq and the S&P 500 reached new record closing highs.

The major averages saw further upside going into the close, ending the session at their best levels of the day. The Dow rose 55.47 points or 0.3 percent to 21,006.94, the Nasdaq climbed 25.42 points or 0.4 percent to 6,100.76 and the S&P 500 advanced 9.77 points or 0.4 percent to 2,399.29.

For the week, the Dow edged up by 0.3 percent, while the Nasdaq and the S&P 500 increased by 0.9 percent and 0.6 percent, respectively.

The higher close on Wall Street came following the release of the Labor Department’s closely watched monthly jobs report, which showed stronger than expected job growth in the month of April.

The report said non-farm payroll employment jumped by 211,000 jobs in April after climbing by a downwardly revised 79,000 jobs in March. Economists had expected employment to increase by 185,000 jobs.

With the stronger than expected job growth, the unemployment rate edged down to 4.4 percent in April from 4.5 percent in March. The unemployment rate had been expected to tick up to 4.6 percent.

The unexpected decrease pulled the unemployment rate down to its lowest level since a matching rate in May of 2007.

The report also said the annual rate of growth in average hourly employee earnings slowed to 2.5 percent in April from 2.6 percent in March.

While the bigger than expected increase in employment paints a positive picture for the economy, the data has reinforced expectations of another interest rate hike by the Federal Reserve next month.

After falling sharply in the previous session, energy stocks rebounded along with the price of crude oil. Reflecting the strength in the energy sector, the Philadelphia Oil Service Index and the NYSE Arca Natural Gas Index spiked by 3.8 percent and 3.5 percent, respectively.

Gold stocks also showed a strong move back to the upside on the day, with the NYSE Arca Gold Bugs Index surging up by 2.4 percent. The gain by the index came after it slumped by 2.9 percent to a nearly two-month closing low on Thursday.

Significant strength also emerged among chemical stocks, as reflected by the 1.8 percent advance by the Dow Jones Chemicals Index. The index rebounded after closing lower for seven consecutive sessions.

Telecom, tobacco, and computer hardware stocks also…

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