Tech leads Wall Street higher
US stocks closed at record levels for a second consecutive session on Friday, as gains in technology and industrial stocks more than offset a lukewarm jobs report. Nonfarm payrolls increased by 138,000 in May, well short of the 185,000 expected by economists. The prior two months were revised lower by 66,000 jobs than previously reported.
NEW YORK — US stocks closed at record levels for a second consecutive session on Friday, as gains in technology and industrial stocks more than offset a lukewarm jobs report.
Nonfarm payrolls increased by 138,000 in May, well short of the 185,000 expected by economists. The prior two months were revised lower by 66,000 jobs than previously reported.
Average hourly earnings rose 0.20% in May, following April’s similar gain, but unemployment rate fell to a 16-year-low 4.30%.
Despite the disappointing data, market participants still largely anticipate the Federal Reserve to raise rates at its June 13-14 meeting, with traders expecting a 90.70% chance of a quarter-point hike, according to Thomson Reuters data.
“It’s certainly surprising. It doesn’t really correlate well with virtually all the other data on the labor market that we’re seeing,” said Russell Price, senior economist at Ameriprise Financial Services, Inc. in Troy, Michigan.
CONCERNS
The modest increase, however, could raise concerns about the economy’s health after gross domestic product growth slowed last quarter and a string of softening data this week, including reports on housing and auto sales.
The economy needs to create 75,000-100,000 jobs per month to keep up with growth in the working-age population. Job gains are slowing as the labor market nears full employment.
The Dow Jones Industrial Average rose 62.11 points, or 0.29%, to 21,206.29, the S&P 500 gained 9.01 points, or 0.37%, to 2,439.07 and the Nasdaq Composite added 58.97 points, or 0.94%, to 6,305.80. For the week, the S&P rose 0.95%, the Dow added 0.59% and the Nasdaq gained 1.54%.
Industrials, up 0.49%, and technology, up 1.04%, were the best performing sectors. The tech sector has been the top performer among the major S& P sectors, with a 2017 gain of 21.26%.
The tech sector was led by Broadcom, which rose more than 8% to hit an all- time high of $253.76, after the chipmaker’s quarterly results beat analysts’ expectations.
Shares of financials, which benefit from higher interest rates, fell as much as 0.90% after the jobs data sparked some worry that the Fed could become cautious after the June meeting, and closed down 0.37%.
Energy was the worst- performing sector, down 1.18%. Brent oil tumbled below $50 a barrel on worries that President Donald Trump’s decision to abandon a climate pact could spark more crude drilling in the United States and worsen a global glut.
Advancing issues outnumbered declining ones on the NYSE by a 1.34-to-1 ratio; on Nasdaq, a 2.07-to-1 ratio favored advancers.
The S&P 500 posted 28 new 52-week highs and 11 new lows; the Nasdaq Composite recorded 82 new highs and 70 new lows.
About 6.37 billion shares changed hands in US exchanges, compared with the 6.65 billion daily average over the last 20 sessions.