Blue-chip stocks are higher today on the back of a June jobs report that blew estimates out of the water. With roughly an hour left in the trading session, the Dow Jones Industrial Average (DJINDICES: ^DJI ) is up by 112 points, or 0.75%.
Employers added a total of 195,000 jobs last month, according to the most recent employment report from the Department of Labor. The figure was well in excess of both the consensus forecast of 155,000 additional jobs and the past year's average monthly gain of 182,000.
"This morning's report is good news," said Acting Secretary of Labor Seth D. Harris. "But our economy still is not performing at its full potential, still not recovering with the speed and strength that working families need."
Some sectors benefited more than others. The leisure and travel industry was at the top of the list, adding 75,000 positions in June. So far this year, monthly jobs growth in the sector has averaged 55,000, which is almost twice the figure for 2012.
This bodes well for a company like Disney (NYSE: DIS ) , the nation's largest operator of amusement parks. When it last reported earnings at the beginning of May, the company surprised analysts on both the top and bottom lines. Its second-quarter net income soared by 32% on a year-over-year basis, while its revenue was up by 10%, indicating healthy growth.
Also considerably higher are firms that provide professional and business services, where 53,000 jobs were added last month. And even the financial industry added 17,000 new jobs. The latter news will no doubt come as a relief to many in the field: Over the past few years, the biggest financial companies in the country have worked to cull their payrolls. JPMorgan Chase (NYSE: JPM ) leads the way in this regard with 17,000 reductions scheduled by the end of 2014. We should know more about its progress when it reports earnings at the end of next week. Analysts expect it to earn $1.43 per share on revenue of $24.77 billion.
Alternatively, the government continued to downsize its payroll. The federal government, for example, cut 5,000 positions in June. Over the past 12 months, it's off by an aggregate 65,000.
In terms of individual stocks, JPMorgan is leading the Dow higher today, up by 2.2% at the time of writing. While it's futile to guess why any particular stock is up on a given day, it seems safe to assume that the nation's largest bank by assets is, at least in part, basking in the glow of today's better-than-expected jobs report.
Heading down, on the other hand, are shares of McDonald's (NYSE: MCD ) , which are off by 0.7% in mid-afternoon trading. As my colleague Matt Thalman observed earlier, investors in the fast-food giant are likely seeing the dark side of today's cheery news. As the economy improves, the Federal Reserve becomes more likely to reduce its support for the economy. And when it does, investors are expected to flee higher-yielding dividend stalwarts like McDonald's in favor of bonds, which should see their interest rates climb.
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