U.S. stocks back at record highs after better jobs data
NEW YORK — A broad-based push higher for stocks sent indexes to records on Thursday following yet more signs that the job market continues to improve.
The Standard & Poor’s 500 index pierced the 2,420-point level for the first time during the morning and kept going. It ended at 2,430.06, up 18.26 points, or 0.8 percent. The Dow Jones industrial average gained 135.53, or 0.6 percent, to 21,144.18, and the Nasdaq composite rose 48.31, or 0.8 percent, to 6,246.83. All three indexes set record highs.
Smaller stocks had even bigger gains, and the small-cap Russell 200 index jumped 25.85, or 1.9 percent, to 1,396.06, though it remains shy of its record.
Driving stocks higher was a report indicating that employers picked up their hiring last month. Payroll processor ADP said private businesses added 253,000 jobs in May, more than economists expected. It’s a reassurance, particularly when growth of the overall economy has remained frustratingly tepid.
The U.S. government’s more comprehensive report on jobs arrives on Friday. It will include hiring by all non-farm employers, and economists expect it to show growth of 176,000 jobs in May.
The data gave yet more encouragement to investors, many of whom were already looking to buy.
“The market’s ahead of itself, but I’m not surprised that the market is ahead of itself,” said Linda Duessel, senior equity strategist at Federated Investors.
Duessel talks often around the country with financial advisers managing money for clients, and many tell her they see any pullback in stock prices as a quick opportunity to buy rather than as a source of concern. That hunger to buy means the S&P 500 has gained within just months what Duessel thought may take a year or so to achieve, given continued economic growth and few signs of a looming recession.
“What you have, it would appear, is an acceleration in earnings with a low inflationary environment, which is Goldilocks,” Duessel said.
President Trump’s announcement late in the trading day that the U.S. would withdraw from the worldwide agreement on climate change had little effect on markets.
Other reports on the U.S. economy were mixed on Thursday. Manufacturing growth picked up last month and was stronger than economists were expecting, but construction spending unexpectedly weakened in April. A separate report showed that the number of workers filing for unemployment claims rose last week, which could be an indication that layoffs are on the rise. The number remains low by historical standards.
The stock market’s gains were widespread, and all 11 sectors that make up the S&P 500 rose. Health care and financial stocks led the way. Producers of raw materials and companies that sell non-essentials to consumers were also particularly strong.
Discount retailer Dollar General jumped to one of the biggest gains in the S&P 500 after it reported stronger earnings for the latest quarter than analysts expected. Its shares climbed $4.80, or 6.5 percent, to $78.19.
Deere rose $2.24, or 1.8 percent, to $124.70 after it agreed to buy Wirtgen Group, a German maker of road-construction equipment for about 4.6 billion euros, or $5.2 billion, including debt.
On the other end was Hewlett Packard Enterprise, which fell to the largest loss in the S&P 500 after it reported quarterly results that disappointed investors. Its shares fell $1.29, or 6.9 percent, to $17.52.