The Dow Jones Industrials (DJINDICES:^DJI) reacted positively to the March employment report from the Bureau of Labor Statistics, rising 38 points as of 11 a.m. EDT. Nonfarm payrolls jumped by 192,000 jobs, with health care, professional and business services, and mining and logging posting the strongest gains. Moreover, the official unemployment rate held at 6.7% even as the labor force expanded by more than 500,000 workers, and that bolstered confidence in the strength of the economy. Yet holding back the Dow was Visa (NYSE:V), the index's most influential component, on negative credit card news from Wal-Mart (NYSE:WMT).
For the Dow on the whole, this week has involved a couple different attempts to reach a new record high. Even though the S&P 500 (SNPINDEX:^SPX) has set several new new records during 2014, today would mark the first time the Dow has exceeded its closing mark on Dec. 31, 2013. After sustaining losses during the first three months of the year, gaining positive momentum in the opening days of the second quarter is exactly what investors want to see from the Dow in its efforts to extend the bull market into a sixth year.
But Visa fell 2%, providing about 25 points of downward pressure on the Dow, after Wal-Mart chose rival MasterCard (NYSE:MA) to handle its store-branded credit card processing. Wal-Mart had been working with Discover Financial, so the move doesn't involve a direct loss of business for Visa. Yet the decision is just the latest development in the choppy relationship between Visa and the big-box retailer, with Wal-Mart suing Visa last week for $5 billion in damages related to swipe-fee practices. The battle between the two companies has been brewing since Wal-Mart chose not to participate in a class action lawsuit against Visa and MasterCard to resolve swipe-fee allegations. With litigation just starting, it could be years before Wal-Mart and Visa resolve their differences and find a way to improve their relationship.
Going into the weekend, the key for the Dow Jones Industrials will be holding on to the morning gains. On numerous occasions lately, the stock market has climbed to impressive heights early in the day, only to give up those gains by the end of the trading session. If the Dow can finally get the positive psychological momentum of a new record close, it could provide exactly the impetus for further gains as earnings season starts in earnest next week.