Although we don’t believe in timing the market or panicking over market movements, we do like to keep an eye on big changes — just in case they’re material to our investing thesis.
Today was a ridiculously busy day for economic data, which, not surprisingly, constricted the broad-based S&P 500 (INDEXSP:.INX) within a very tight range for most of the day.
On the bright side, the U.S. Labor Department noted that weekly initial jobless claims fell 9,000 to a seasonally adjusted 323,000 — just above their lowest level in six years. Fewer jobless claims would signal that through either full or part-time work, Americans are finding jobs. Similarly, worker productivity was revised up to 2.3% from a previous estimate of 0.9% in the second quarter, all while labor costs remain unchanged. That could bode well for corporate margins in the upcoming quarter if this trend continues.
On the other hand, the ADP employment report noted the creation of just 176,000 private sector jobs when 180,000 was forecast by economists. While not a huge miss, it’s enough to rattle the cage a bit. In addition, crude inventories fell by a little more than 1.8 million barrels, which is bad news for consumers, with oil prices already very much near a two-year high.
By the end of the day, the worker productivity and cost data proved a little too strong for investors to ignore, and the S&P inched higher by two points exactly (0.12%), to close at 1,655.08, its third-straight day of gains.
Industrial and construction components supplier Fastenal Company (NASDAQ:FAST) is a new name among the day’s best gainers, but it led the pack, advancing 6% after reporting solid sales for the month of August. Year-over-year sales improved 2.5%, but adjusting for the extra day in the year-ago period, daily-rate sales actually increased 7.2%. It also doesn’t hurt that, while factory orders were down, they came in better than expected with ISM services and worker productivity also trumping estimates. As long as the U.S. manufacturing sector is expanding, Fastenal Company (NASDAQ:FAST) shareholders will remain in the driver’s seat.