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These Stocks Are Leading the Dow's Charge

http://www.fool.com/investing/general/2013/07/05/these-stocks-are-leading-the-dows-charge.aspx

Dan Dzombak
July 5, 2013

Following a better-than-expected employment report, the Dow Jones Industrial Average (INDEX: ^DJI) is up 89 points, or 0.6%, to 15,078 as of 1:30 p.m. EDT. The S&P 500 (INDEX: ^GSPC) is up 0.6% to 1,625.

There were two U.S. economic releases today.

Report

Period

Result

Previous

Nonfarm payrolls

June

195,000

195,000

Unemployment rate

June

7.6%

7.6%

The Department of Labor reported that the U.S. economy added 195,000 jobs in June. Analysts had expected the economy to add just 155,000 jobs. The government also revised the jobs numbers for April and May upward to 199,000 and 195,000, respectively. However, the expectation-beating jobs numbers were not enough to move the unemployment rate down, as more people entered the workforce. The unemployment rate only includes those who are actively looking for work; many long-term unemployed people stop looking for work and are therefore not included in the official unemployment rate. Americans are gradually re-entering the labor market as the economy improves, which is good for the economy though it keeps the official unemployment rate high.

This good news is also potentially bad news for assets prices, which are being propped up by the Federal Reserve's $85 billion-per-month asset purchases each. Bonds reacted negatively to the news, with the yield on the 10-year Treasury rising by 0.2% to 2.7%. The chart below is only updated weekly, but you can see the massive fall in bonds over the past two months as investors have begun to worry about the Fed's tapering of asset purchases (yields and bond prices move inversely).