If you want some free trading education on the different variables that can create change in the value of U.S. stocks, then the price movements that happened in equities on July 2 could serve as a helpful example.
The S&P 500 Index, which is a benchmark group of stocks, registered a minor loss for the day, ending 0.1 percent lower at 1,614.06 at 4 p.m. in New York, according to Bloomberg. The index had a hard time staying above its 50-day moving average, which is close to 1,624.
The Dow Jones Industrial Average also recorded a loss for the session, finishing 0.6 percent lower at 14,886, according to Dow Jones Newswires. This came after the group of stocks fared better earlier in the session, trading as much as 74 points higher.
Job market concerns
The labor market has been a major concern of many market participants for some time, and jobs were cited as a major reason for U.S. stocks moving lower, the media outlet reports. Global market participants could have caused these equities to depreciate as a result of their concern that the jobs report the U.S. Labor Department will release later in the week will not be particularly strong.
In addition to this data, the ADP Research Institute also plans to release figures for this particular area on July 3, according to Bloomberg.
Economists contributing to a poll conducted by the media outlet have predicted that in the month of June, the nation's employers added 165,000 positions. This median forecast indicates that these market experts believe the nation created roughly the same amount of new jobs last month as they did in May. The participants in the poll also predicted that the jobless rate will likely drop to 7.5 percent.
A poll conducted by the Wall Street Journal indicated a similar result, as the economists contributing to this survey projected that the nation's employers added 160,000 new jobs, and the unemployment rate declined to 7.5 percent.
Comments on Fed stimulus
Markets were pushed higher in value early in the day, as global investors responded to statements made by William Dudley, president of the New York Federal Reserve Bank, according to Bloomberg. The government official said that depending on the state of the economy, the central bank may extend the time during which it conducts asset purchases. This comment helped to provide some support to global markets, at a time when they have received a wide range of conflicting messages from various officials of the Federal Reserve.
Ben Bernanke stated late last month that the existing program of asset purchases could be lowered in 2013 and then ended entirely in 2014, depending on the strength of certain leading indicators. After the head of the Federal Reserve stated this following the most recent meeting of the Federal Open Market Committee, asset markets suffered sharp declines.
One major factor that Bernanke referenced as being a key contributor to the decision of how and when this stimulus will be altered is the labor market, according to The Wall Street Journal. The head of the Federal Reserve has stated in the past that he is ready to harness both asset purchases and benchmark interest rates to help fuel the economic recovery until the unemployment rate declines to a more healthy level.
The bond purchases of the central bank, which some have referred to as being draconian in their severity, have managed to draw substantial visibility. The balance sheet of the Federal Reserve has expanded to more than $3 trillion over the last several years, as the organization's officials have opted to purchase bonds with both short-term and long-term maturities.
The future announcements related these stimulus measures could easily cause sharp fluctuations in asset prices.
If you want more free trading education, you can find it at TradingPub, home to some of the top investors and traders in the industry.