The July jobs report helped stabilize S&P 500 (INDEXSP:.INX) futures pre-market, as while there were some bright spots, it was not strong enough to move expectations for interest rates hikes from the Federal Reserve.
The S&P hit an early-morning high at 1937.35 before dipping over 20 points before noon, and then bouncing higher to finish -0.3% at 1925.15.
The economy added 209,000 nonfarm payrolls in July, which was less than the 209,000 expected. June's number was revised up by 10,000.
Hourly earnings were flat month-over-month. Economists had been forecasting a 0.2% gain.
The PCE deflator rose 1.6%, below the 1.7% gains, which helped quell inflation fears, giving support to US Treasuries.
The unemployment rate was slightly higher-than-expected at 6.2%, but that was because of an increase in the labor force participation rate. That means more people are entering the workforce, which is a positive.
Looking deeper in the market, we saw intraday weakness in junk bonds and strength in US Treasuries, indicative of fear among traders.
Major bank stocks suffered as the International Swaps and Derivatives Association ruled that Argentina's sovereign debt default constitutes a credit event, meaning sellers of credit default swaps must compensate buyers. However, net exposure to the debt in question is just $1 billion.
The small-cap Russell 2000 (INDEXRUSSELL:RUT) also underperformed.
In earnings, LinkedIn (NASDAQ:LNKD) was the star of the show today, soaring 11.7% to $201.78 after beating consensus estimates by a wide margin Thursday afternoon.
Dow Jones Industrial Average (INDEXDJX:.DJI) component Procter & Gamble (NYSE:PG) rose 3.0% after delivering a solid earnings beat.
Action camera maker GoPro (NASDAQ:GPRO) delivered a strong report, exceeding revenue and earnings forecasts, but the stock fell 14.6% as the numbers weren't strong enough to please the momentum traders that bid the stock up over 100% since it came public.
In international news, Israel and Palestinian militants arranged a 72-hour cease-fire, but the agreement unraveled quickly.
Tomorrow's Financial Outlook
On Monday, we will see earnings reports from the likes of Michael Kors (NASDAQ:KORS), American International Group (NYSE:AIG), and Tenet Healthcare (NYSE:THC). There are no major US economic reports on the calendar.
Traders will continue monitoring geopolitical developments in Gaza and Ukraine, but overall, it appears that volatility is finally picking up after an extended period of stability.
Whether this will lead to a real pullback remains questionable. The S&P 500 is still less than 4% off all-time high, and the bulls' comeback on Friday shows that the bulls still have some mettle.
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