Stocks hit highs as bond yields drop
Bond yields sank Friday to their lowest level of the year, and the dollar’s value fell against rivals after the nation’s job growth slowed last month. But stock indexes chugged again to record heights, led by technology companies and dividend payers.
Yields fell immediately after the government said that employers added 138,000 jobs last month, which was short of economists’ expectations and a slowdown from April’s hiring. The yield on the 10-year Treasury dropped to 2.15% from 2.21% late Thursday and hit its lowest level since mid-November.
The government’s jobs report also said that hiring was weaker in March and April than earlier reported. The unemployment rate fell to 4.3% last month, its lowest level since 2001.
Stocks opened for trading an hour after the release of the jobs report, and they were higher for nearly the entire day. The Standard & Poor’s 500 index rose 9.01 points, or 0.4%, to 2,439.07. The Dow Jones industrial average gained 62.11, or 0.3%, to 21,206.29 and the Nasdaq composite climbed 58.97, or 0.9%, to 6,305.80.
Many economists don’t expect the latest jobs report to dissuade the Federal Reserve from raising interest rates at its next policy meeting in two weeks.
Friday’s drop in interest rates helped boost stocks in industries that pay big dividends. Real estate investment trusts rose twice as fast as the overall S&P 500, for example.
Technology stocks had the day’s biggest gains, with those in the S&P 500 jumping 1%. It’s the latest move higher for the streaking sector, which is up 21.3% for the year.
Chip maker Broadcom had biggest gain in the S&P 500 after reporting stronger quarterly revenue and profit than analysts had forecast. It rose $19.94, or 8.5%, to $254.53.
Lululemon gained $5.62, or 11.5%, to $54.29 after the athletic apparel company reported better results for the latest quarter than analysts expected.
On the opposite end were energy stocks, which deepened their losses for 2017 after the price of oil sank. Benchmark U.S. crude oil fell 70 cents, or 1.4%, to $47.66 a barrel.
Energy stocks in the S&P 500 lost 1.2% on Friday, and they’re down 14% for the year while the overall index is up 8.9%.
Gold rose $10.10 to $1,280.20 per ounce and silver added 24 cents to $17.53 per ounce.
The dollar fell to 110.50 Japanese yen from 111.33 yen late Thursday. The euro rose to $1.1276 from $1.1214, and the British pound rose to $1.2880 from $1.2876.
Japan’s Nikkei 225 index rose 1.6% to cross above the 20,000 level for the first time since 2015. Hong Kong’s Hang Seng index rose 0.4% and South Korea’s Kospi jumped 1.2%.
Germany’s DAX gained 1.2% and France’s CAC 40 rose 0.5%. The FTSE 100 in London added 0.1%.