Market review: week ending Oct. 31



Stocks improved again this week, further recovering from the 7 percent pullback in October. The S&P 500 grew 0.7 percent, a record high for the index. The Dow Jones Industrial Average rose over 1 percent. The technology-heavy Nasdaq Composite was mostly flat. The stocks were led by a jump in consumer staples stocks.

Third quarter earnings continued to encourage investors. Ninety percent of stocks announced earnings and 75 percent of those beat expectations.

The main drivers of the stocks were economic data. On Wednesday, investor sentiment was boosted by job growth data. ADP, a payroll firm, announced that job growth in October was healthy.

The economy created more than 200,000 jobs for the ninth month in a row in October. On Thursday, the data was reinforced by a Labor Department announcement that jobless claims fell again. Jobless claims are at a 14-year low.
Although the job growth was lower than expected, it indicates the fastest job growth since the late 1990s.

Following the election midweek, stocks seemed to improve. This may have been caused by speculation that markets tend to perform well after midterm elections. In some periods of divided government, the economy and markets have performed well. This observation further improved investor sentiment.

The European Central Bank announced a commitment to creating economic growth in the region. European markets grew significantly following the announcement and U.S. stocks followed the upward trend.