Stocks Solidly Higher After Blowout June Jobs Number –

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Stocks were higher on Friday, July 7, after the U.S. economy added far more jobs in June than anticipated. 

The S&P 500 rose 0.28%, the Dow Jones Industrial Average added 0.25%, and the Nasdaq increased 0.36%.

The U.S. economy added 222,000 jobs in June, according to the latest report from the Department of Labor. Analysts expected just 177,000 new positions.

April and May’s numbers were also revised higher. May’s job gains were increased to 152,000 from 138,000, while April’s increase climbed to 207,000 from 174,000. 

The U.S. unemployment rate was increased to 4.4% from 4.3%, while average hourly wages increased 0.2% from the previous month. Hourly wages year over year rose 2.5%. 

“Today’s jobs report shows the continued strength of the U.S. economy and a significant increase over last month’s report,” said Tony Bedikian, head of global markets at Citizens Bank. “The labor market is tightening, but we are still seeing consistent job growth.” 

Crude oil prices were lower ahead of weekly drilling activity data out Friday afternoon. A weekly count on active oil rigs drilling for crude in the U.S. will be released by Baker Hughes at 1 p.m. ET.

The count in the previous reporting period showed the first decline in activity in 24 weeks. The number of active U.S. rigs drilling for oil fell by two in the past week to 756 rigs. The number of active rigs has only dropped two times this year.

West Texas Intermediate crude was down 2% to $44.58 a barrel on Friday.

Crude oil prices rallied on Thursday, July 6, after a larger-than-expected drawdown in domestic supplies. U.S. inventories dropped by 6.3 million barrels in the past week, according to the Energy Information Administration. The drop was nearly four times the expected decline.

World leaders convened in Hamburg, Germany for the 12th meeting of the G20 Friday, with the two-day summit of leaders from the world’s biggest economies likely to address the escalating threat of North Korea, global trade and climate change.

North Korea has been on the world’s radar after launching an intercontinental ballistic missile on July 4 that it says is able to carry a large nuclear warhead. The U.S. Defense Department believes the missile could reach as far as Alaska and possibly other parts of the North American mainland.

President Donald Trump and Russian President Vladimir Putin met on the sidelines of the summit to discuss, among other things, sanctions against Russia and the country’s involvement in the fight against the so-called Islamic State. Meeting outcomes will be closely dissected as the Trump White House continues to battle allegations of collusion with the foreign government during the 2016 election.

The Federal Reserve Board will submit its July 2017 Monetary Policy Report to Congress on Friday ahead of Fed Chair Janet Yellen’s testimony the following week. The report will be made public at 11 a.m. ET.

Yellen is set to deliver her semiannual testimony on monetary policy on Capitol Hill next week, first to the House Financial Services Committee on Wednesday, July 12, at 10 a.m. ET, and then to the Senate Banking Committee on Thursday, July 13, at 10 a.m. ET.

Fed members have recently struck a hawkish tone. In minutes from a June policy meeting, “several” Fed members back an unwinding of its $4.5 trillion balance sheet within a “couple of months.”

Members also indicated a willingness to continue increasing interest rates at coming meetings even with recent softening inflation trends. The Fed has said it sees recent inflation weakness as transitory.

The Federal Open Market Committee, the monetary policy arm of the U.S. central bank, raised interest rates for the second time this year at its June 13-14 meeting.

Berkshire Hathaway Inc. (BRK.A) (BRK.B) announced early Friday its plans to purchase bankrupt company Energy Future for $9 billion. The deal also includes the purchase of Energy Future’s Oncor Electric Delivery Co., giving it an equity value of roughly $11.25 billion.

The deal has an enterprise value of around $18 billion.

Texas regulators had previously blocked two attempts by others to purchase Oncor. The company is one of the biggest power transmission networks in the U.S., according to Reuters.

Campbell Soup Co. (CPB) rose nearly 2% after acquiring organic soup company Pacific Foods for $700 million. Pacific will slot into Campbell’s Americas Simple Meals and Beverages unit. 

Tesla Inc. (TSLA) bounced back on Friday after briefly entering bear market territory on Thursday, July 6. The electric automaker has slumped in recent days: first, after disappointing second-quarter deliveries data and then, after failing to secure a safety award from the Insurance Institute of Highway Safety. 

O’Relly Automotive Inc. (ORLY) , Advance Auto Parts Inc. (AAP) and Auto Zone Inc. (AZO)  were on watch Friday following a bearish Bank of America Merrill Lynch note on the auto-parts retail industry. Advance Auto Parts was downgraded to “underperform” from “neutral” while both O’Reilly Automotive and Auto Zone were downgraded to “neutral” from “buy.”

Winnebago Industries Inc. (WGO) was rated a buy at Stifel Nicolaus with a $40 price target as the firm initiated coverage on the recreational vehicle manfacturer. Stifel analysts are optimistic over new product launches and the stock’s valuation. 

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