Blue-chip stocks are broadly higher this afternoon after the Bureau of Labor Statistics released better-than-expected jobs figures for the month of May. With roughly an hour left in the trading session, the Dow Jones Industrial Average (INDEXDJX:.DJI) is up by 156 points, or 1.05%.
According to the BLS, the U.S. economy created a net 175,000 jobs last month. For what it’s worth — which generally isn’t much — economists surveyed by MarketWatch predicted an increase of 164,000 jobs. Yet the expectation-beating job-creation wasn’t enough to push the official unemployment rate down: The latter increased to 7.6% from 7.5% the preceding month as a net 420,000 people entered the labor force.
A Yahoo! Inc. (NASDAQ:YHOO) Finance blog post captured the market’s reaction appropriately, noting that the report was “good, but not too good.” On one hand, great news on the jobs front could induce the Federal Reserve to ease off of its support for the economy, which, in turn, would likely cause equity prices to deflate. But on the other hand, bad news would incite fear of a potential double-dip recession. Just like Goldilocks’ porridge, a slight beat was just right as far as the market was concerned.
On the individual stock front, shares of The Travelers Companies, Inc. (NYSE:TRV) are leading the Dow higher this afternoon, up by 2.3% at the time of writing. Given that it’s an insurance company, the fact that the jobs report wasn’t outright awful probably has a lot to do with The Travelers Companies, Inc. (NYSE:TRV)’ ascent today. The better the economy is doing, the sooner long-term interest rates will increase. And the sooner long-term rates increase, the sooner The Travelers Companies, Inc. (NYSE:TRV)’ bottom line will pick up to full steam.
Alternatively, the worst-performing blue-chip stock today is AT&T Inc. (NYSE:T) , followed closely by its primary competitor, Verizon Communications Inc. (NYSE:VZ) . While it’s always hard to pin down the precise reason that a specific stock is moving on any given day, it’s particularly tough in the case of the telecoms of late, as there has been a litany of news stories involving the sector.