John Hancock: Weekly Market Recap Weed Ended October 5th

Back to work

The unemployment rate slipped to 3.7% last month, the lowest level since 1969, as the economy generated 134,000 new jobs, the smallest monthly increase in a year. However, estimates of the job gains recorded in July and August were revised sharply upward.

Yield pressure

Concerns about inflation and the pace of interest-rate increases weighed on bond prices, as the yield of the 10-year U.S. Treasury bond surged above 3.20%—the highest level in more than 7 years. As recently as September 6, the yield was below 2.90%.

Tech trouble

Stocks started out the week with strong gains but dropped sharply on Thursday and Friday, with information technology stocks weighing on the broader market. The NASDAQ and a small-cap benchmark, the Russell 2000 Index, trailed the S&P 500 and the Dow by wide margins.

Dividend boom

Dividend payments by companies in the S&P 500 Index are on track to break a record for the seventh year in a row, according to S&P Dow Jones Indices. So far this year, companies in the index have announced 291 dividend increases, with only 2 dividend reductions.

Earnings ahead

Companies are preparing to begin reporting third-quarter results, with major banks kicking off earnings season late in the week. Some bank stocks have been lifted in recent days by rising interest rates, although analysts are expecting mixed earnings results for the industry as a whole.