Payrolls report lifts Wall Street
NEW YORK — US stocks advanced on Friday, buoyed by a solid payrolls report for November that locked in expectations for an interest rate hike from the US Federal Reserve this week and raised optimism about economic prospects in 2018.
Technology stocks such as Microsoft, Apple and Oracle helped pace the advance, as they continued to rebound from a selloff in the sector earlier last week.
Nonfarm payrolls rose by 228,000 jobs last month amid broad gains in hiring as the distortions from the recent hurricanes faded, Labor department data showed, topping expectations calling for a rise by 200,000 jobs.
Average hourly earnings rose 0.20% in November after dipping 0.10% the prior month, but fell shy of the estimated 0.30% increase.
“It’s hard to find much fault with it. I guess if you are looking to find fault it would be that the wage growth isn’t as fast as we would like it to be and came up a little bit short,” said JJ Kinahan, chief market strategist at TD Ameritrade in Chicago. “It’s a great report overall.” The Dow Jones Industrial Average rose 117.68 points, or 0.49%, to 24,329.16; the S&P 500 gained 14.52 points, or 0.55%, to 2,651.50 and the Nasdaq Composite added 27.24 points, or 0.40%, to 6,840.08.
For the week, the Dow rose 0.40%, the S&P advanced 0.35% and the Nasdaq fell 0.11%.
The jobs data cemented expectations the Fed will raise rates at its meeting this week as traders now see a 96.20% chance of a quarter-point hike, according to Thomson Reuters data.
“The focus is moving to what the Fed is going to do next week, what the composition of the board is going to look like,” said Rob Stein, chief executive off icer of Astor Investment Management in Chicago.
US President Donald Trump signed legislation to fund the federal government for two more weeks, averting a government shutdown while Congress negotiated a longer-term budget deal, temporarily removing a potential headwind for stocks.
Microsoft rose 2.02% as the biggest boost to the S&P 500. The S& P technology sector was up 0.40% and was on track for its fourth straight day of gains, erasing all of the nearly two-percent decline suffered by the sector to start the week.
Alexion Pharmaceuticals jumped 7.20% and was the best performer on the S&P, after a report said hedge fund Elliott Management wanted the company to take steps to boost its stock price, including by exploring a sale. The gained lifted the S&P health care sector 1.10%.
Shares of American Outdoor Brands tumbled 9.50% after the Smith & Wesson firearms maker provided a disappointing earnings forecast. Shares of peer Sturm Ruger also dropped 8%.
Advancing issues outnumbered declining ones on the NYSE by a 1.47 to one; on Nasdaq, a 1.23-to-1 ratio favored advancers. —