Morgan Stanley rose 3.4% after announcing a doubling of its dividend and plans to buy back $12 billion of its own stock. Other bank stocks were mixed following their own announcements. Goldman Sachs rose 1.1%, but Bank of America fell 1.6%. As a group, financial stocks in the S&P 500 fell.
The big piece of economic data this week will be Friday’s jobs report for June. Economists expect it to show U.S. employers created 675,000 more jobs than they cut, with the unemployment rate falling to 5.7%.Job growth has been choppy recently, with gains falling disappointingly short of economists’ expectations in recent months. That’s key because the Fed is likely to keep up its support for the economy through low interest rates as long as the job market looks like it needs help.
“This Friday’s unemployment number is pretty important because it’s going to determine the trajectory of when the Fed is actually going to adjust its policies,” said Andrew Slimmon, portfolio manager at Morgan Stanley Investment Management. The central bank, meanwhile, has stuck by its position that high inflation is likely to be only temporary. That would allow it to keep interest rates low for longer than it otherwise might.
Long-term bond yields have leveled out after jumping earlier in the year in part because of inflation concerns. The yield on the 10-year Treasury slipped to 1.47% from 1.48% late Monday.