Second month of strong hiring gives markets day of small gains
Banks and other stocks climbed Friday after the government reported more gains in hiring last month, the latest signal that the economy is continuing to hum along. The modest gains wrapped up another quiet week for the stock market.
The Department of Labor said U.S. employers added 209,000 jobs last month. Investors sold government bonds and bet that interest rates are going to rise, which lets banks make more money on loans. Technology companies also rose. Weight Watchers soared after reporting a strong quarter while Viacom, the media company that owns Comedy Central and MTV, sank.
July was the second consecutive month of strong hiring, suggesting that the U.S. economy is still growing steadily as countries in Europe and less developed countries come out of long slumps.
“The economy is in pretty good shape,” said Paul Zemsky, chief investment officer for the multi-asset business of Voya Investment Strategies. “We’re seeing for the first time more of a globally synchronized growth.”
He said that will lead to a stronger global economy and will help American companies and stocks if growth in the U.S. falters.
The Standard & Poor’s 500 index added 4.67 points, or 0.2 percent, to 2,476.83. The Dow Jones industrial average rose 66.71 points, or 0.3 percent, to 22,092.81. That was its ninth gain in a row. The Nasdaq composite climbed 11.22 points, or 0.2 percent, to 6,351.56. The Russell 2000 index of smaller companies gained 7.09 points, or 0.5 percent, to 1,412.32.
European stock indexes made even larger gains. France’s CAC 40 index climbed 1.4 percent and the DAX in Germany jumped 1.2 percent. The British FTSE 100 gained 0.5 percent.
Bond prices dropped, sending yields higher. The yield on the 10-year Treasury note climbed to 2.26 percent from 2.22 percent as investors concluded it is more likely the Federal Reserve will raise interest rates again later in the year.
Bank of America climbed 60 cents, or 2.5 percent, to $24.98 and KeyCorp picked up 37 cents, or 2.1 percent, to $18.40.
Despite the gains Friday and the Dow’s long winning streak, most stocks have hardly moved over the last two weeks. The market barely reacted to news Thursday that Special Counsel Robert Mueller impaneled a grand jury as he continues to investigate Russia’s meddling in the presidential election.
Investors have consistently ignored surprising or unusual news out of Washington, and President Donald Trump’s tweets don’t affect stocks the way they did six months ago, either.
Zemsky, of Voya, said that with the economy and corporate earnings doing well, investors will stay the course unless something much more dramatic happens.
“Selling stocks on a tweet or a news headline when the fundamentals are good is going to ultimately lead to losses,” he said.