The stock market ended the week on a downward note on Friday, sending most major market benchmarks to slight overall losses for the week. Most market participants focused on the September U.S. employment report, which showed that the economy produced 156,000 nonfarm jobs last month. The unemployment rate moved higher by a tenth of a percentage point to 5%, and a $0.06 rise in average hourly wages was just large enough to make most people believe that the Federal Reserve is still likely to boost interest rates at its last meeting of the year in December. The SPDR S&P 500 ETF (SPY -0.35%) fell a third of a percent, and foreign markets performed similarly, with the iShares MSCI Emerging Markets ETF (EEM -0.43%) falling about half of a percent. Still, several stocks still managed to post solid gains, and Frontier Communications (FTR), Gap (GPS 3.20%), and Sunrun (RUN 0.89%) were among the best performers on the day.
Frontier fights against downward rate trends
Frontier Communications jumped 6% after the telecom company responded to a fact sheet issued by the Federal Communications Commission regarding potential regulation of business data services. Frontier CEO Dan McCarthy explained that the FCC fact sheet attempts to clarify proposed reductions in rates that local exchange carriers charge for the use of their network infrastructure, highlighting the fact that Ethernet-based products won't be regulated and existing contracts won't be disrupted. Frontier intends to fight mandated rate changes, which reflect some but not all of the reductions industry giants like Verizon had sought. Verizon would benefit from paying lower rates to Frontier and similar carriers, but Frontier wants to see any rate changes take into consideration the size of the affected carrier. Investors took the fact sheet as a positive, and it will be useful if Frontier can sustain its current rate structure going forward.
Gap shares climb out of the gap
The Gap jumped 15% despite posting less than spectacular sales results in September. The retailer said its comparable-store sales fell 3% last month, but it also said it believed a fire at its distribution center in New York State was responsible for the bulk of the decline. The company's Old Navy store concept was the bright spot in the Gap group, with positive comps growth of 4% despite some negative headwinds from the distribution center fire. Still, drops of 9% at Banana Republic and 10% at the namesake Gap concept point to the challenges the company continues to face. Nevertheless, Gap investors were apparently expecting far worse, and they hope Gap will be able to reverse its negative trends going into the holiday season.
Sunrun gets a key vote of confidence
Finally, Sunrun rose 6%. The solar company got an upgrade from analysts at Goldman Sachs, who boosted their rating on Sunrun from neutral to buy. With a $10 price target on the stock, Sunrun still has 50% upside potential, according to the analyst company, and the solar player's growth potential could be greater than the average for the industry. Solar stocks haven't performed all that well so far in 2016, but even a hint of a turnaround for the hard-hit sector could spur further interest in Sunrun and its peers going forward.