Records, records, everywhere! The broad-based S&P 500 (SNPINDEX:^GSPC) crossed and held the 1,600 level, the Dow Jones Industrial Average briefly touched the 15,000 level intraday, and the Nasdaq Composite ended at another 12-1/2 year high.
The big boost in today's market was a surprisingly better-than-expected nonfarm payroll report, which showed the gain of 165,000 jobs in April – much higher than the 145,000 economists had forecast, and considerably stronger than the ADP private-sector employment report would have suggested earlier in the week. Stronger job numbers would signal that the economy is rebounding faster than economists had imagined, and could lead to the return of top-line business growth instead of simply cost-cutting.
For the day, the S&P 500 ended higher by 16.83 points (1.05%) to close at another all-time high of 1,614.42. The 1% gain in the S&P 500 was certainly robust, but the following three components stood out on this record-setting day.
It was certainly an odd day for the S&P 500's best performer U.S. Steel (NYSE:X), which rose 6.3% after reporting a considerably worse-than-expected first-quarter loss. U.S. Steel blamed increased competition and higher costs as the reason why its flat-rolled steel segment turned a $183 million profit in the same period last year into a $13 million loss this quarter. Furthermore, U.S. Steel alluded that things are going to get worse before they get better. U.S. Steel is certainly benefiting from today's strong jobs report and strength in most commodities; however, between its huge debt load and prospects for worsening losses, I'd just as soon look elsewhere.
Financial services provider Charles Schwab (NYSE:SCHW) also added 6.3%, following a press release yesterday that noted there were 13 mergers and acquisitions in the registered investment advisory segment in the first quarter – the highest level in a year. The thesis here is simple: If the economy is doing better, and jobs are being added at a faster pace than economists expect, then Schwab's financial services, ranging from brokering to investment and M&A, will be called upon more often. A report from Reuters that the demise of brokerage profits is overrated also helped fuel optimism in the sector.
Finally, chip maker Advanced Micro Devices (NASDAQ:AMD) continued its monumental run this week, tacking on another 5.6%. All told, shares rose 37% this week as investors unleash their optimism surrounding AMD's key wins in the next-generation Microsoft Xbox and Sony Playstation 4. The gaming industry has been waiting years for updates to these consoles, and AMD looks poised for some quick gains on what should be strong sales for these next-generation gaming devices.