Major stock market indices closed significantly higher on Friday, ending the week up around 2%. The May job report offered a big surprise that gave shares a boost.
Nonfarm payrolls rose by a better-than-expected 339,000 in May versus the Econoday consensus of 190,000. Private sector employment rose by 283,000 versus 165,000 expected, while manufacturing employment fell by 2,000 versus an 8,000 increase forecast.
The unemployment rate rose to 3.7%, ahead of the forecast of 3.5%.
The US Senate passed the bill raising the debt ceiling on Thursday evening and is now awaiting President Biden's signature.
The US 10-year Treasury yield rose 8 basis points to 3.69%. The CME FedWatch tool shows a roughly 75% chance of no rate hike at the Federal Reserve's June meeting, and the rest of the Fed watchers expect a quarter-point rate hike.
Stock market rallies in afternoon trading
The Nasdaq gained 1.1%. The Dow Jones Industrial Average showed the most strength, rising 2.1% and reclaiming its 50-day moving average in bullish fashion. The S&P 500 gained 1.5%.
The iShares Russell 2000 ETF (IWM) outperformed the major indices, gaining 3.6%. The Dow and Russell 2000 posted their best daily gains since November, according to Dow Jones Market Data. The Dow was up 701 points on the day.
The Dow and Nasdaq each posted 2% weekly gains, and the S&P 500 was right behind, up 1.8%.
First Trust Nasdaq 100 Equal Weighted ETF (QQEW) is up 1.1%, indicating broader participation in the rally.
The Invesco QQQ Trust ETF (QQQ), which tracks the Nasdaq 100, rose 0.8%. And the innovator IBD 50 ETF (FFTY) is up 1.9%.
According to preliminary figures, volume on the NYSE and Nasdaq fell slightly on Thursday compared to the same time.
Crude oil rose 2.6% to $71.92 a barrel. Gold futures fell 1.5% and remained below the psychological $2,000 an ounce mark. Bitcoin price, meanwhile, edged up 1.7% to $27,375.
Stock Market Profit Driver: MongoDB Profits Soar 180%
IBD 50 stock Broadcom (AVGO) rose 2.8% after the company reported stronger-than-expected earnings and sales for the second quarter. The sales forecast for the third quarter exceeded analysts' forecasts. Shares are in the 20% gain zone of a flat basis with a buy point of 648.60.
Lululemon Athletica (LULU) gained 11.3% on big volume after the company reported better-than-expected adjusted earnings per share and revenue for the first quarter. Same-store sales increased 13% year-over-year. The sportswear and yogawear retailer's inventories rose 24%.
Stocks retreated from larger morning gains but are still on track to reclaim their 50-day moving average.
IBD 50 stock MongoDB (MDB) soared 28% on strong volume after significantly beating its April quarter adjusted earnings and sales. In addition, the EPS and sales forecasts for the fiscal year were raised. MongoDB's earnings rose 180% year-over-year to 56 cents a share.
IBD 50 stock asana (ASAN) reversed lower, shedding 2.8% on large volume after reporting a smaller-than-expected loss for the quarter ended April late Thursday.
Cloud Connectivity Provider samsara (IOT) soared 27.9% after reporting a smaller-than-expected first-quarter loss and higher sales. The stock broke a base and cleared the 22.69 buy point on strong trading.
Charging inventory for electric vehicles ChargePoint (CHPT) fell 7% after reporting a bigger-than-expected first-quarter loss and a drop in sales late Thursday. Management issued a sales guidance for the second quarter that came in below analysts' estimates.
Breakout mover: Cathie Wood is adding to this stock
More stock market breakouts on Friday included UiPath (PATH) which surpassed the buy point of a cup base of 18.22. Shares are up 1.7% and are at the bottom of the 5% buy zone, which extends to 19.13.
The move came after news that Ark Invest CEO Cathie Wood was selling shares of Nvidia (NVDA) and bought more PATH for their ARK Innovation ETF (ARKK). PATH is the fourth largest holding in the fund.
Extreme networks [ticker symb=EXTR] up 4.9% and breaking out of a saucer base with a buy point of 21.13. Shares hit an all-time high on Friday. EXTR has been on an upward trend since the networking software company reported better-than-expected earnings and sales and raised its June-quarter revenue forecast above analysts' estimates on April 26.
Aehr test systems (AEHR) is up 7.3% and broke a cup base indicating a buy point of 40.79. The move came after the semiconductor test systems maker announced that an unnamed new customer had placed an order for a system to manufacture silicon carbide metal transistors for vehicles. Analysts are expecting EPS growth of 51% in the fiscal year ended May and an impressive 77% increase in the next fiscal year.
ATI (ATI) climbed 6.9% and broke a trendline entry, decisively retaking its 50-day moving average. Entry is around 37 and the stock is still forming a double bottom with an entry of 39.93.
The specialty metals company rose after the Senate passed the debt ceiling bill, sparking renewed economic optimism. Separately, China is said to be working on ways to boost its real estate market, which could boost demand for base metals.
Telecom stock sell-off
Telecom stocks took a tumble, according to a Bloomberg report Amazon (AMZN) is in talks with wireless carriers to offer low-cost or free wireless service to its US Amazon Prime members. But Amazon and Verizon Communications (VZ) denied the report. T Mobile USA (TMUS) is said to have also denied having held talks.
AMZN rose 1.2% while T-Mobile fell 5.6%. AT&T (T) fell 3.8% on the news and Verizon lost 3.2%. Verizon is the Dow's biggest loser today.
An article in the Wall Street Journal previously reported on this cellular and satellite service provider dish network (DISH) has been in talks to sell its cellular plans to Amazon. DISH is up 16.2% today on large volume.
Follow Kimberley Koenig on Twitter for more stock market news @IBD_KKoenig.
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