Stock surge: ‘There’s euphoria today’
NEW YORK — After weeks of conflicting signals about the strength of the economy, a big gain in the jobs market gave Wall Street reason to celebrate Friday.
The stock market surged, traders donned party hats, and the wave of buying drove three indexes through major milestones.
“There’s euphoria today,” said Stephen Carl, the head equity trader at The Williams Capital Group. “That’s what you’d have to call it.”
The Dow Jones industrial average punched through another milestone, 15,000, before easing back. The Standard and Poor’s 500 index closed above 1,600 for the first time.
The Dow rose 142.38 points to close at 14,973.96, up 1 percent. The S&P 500 index surged 16.83 points, or 1 percent, to 1,614.42.
A surprisingly strong job report set it all off. U.S. employers added 165,000 new workers in April and many more in February and March than previously estimated. The unemployment rate fell to the lowest level in four years, 7.5 percent.
The surge in U.S. hiring comes after weeks of conflicting signals about the strength of the global economy. The unexpectedly strong numbers jolted markets higher from the start of trading.
On the floor of the New York Stock Exchange, brokers sported baseball caps emblazoned with “Dow 15,000.”
Coming after a poor March jobs report and some recent data showing economic weakness, the employment figures helped ease fears that U.S. hiring might be slumping for a fourth straight year. The job market is benefiting from a resurgent housing market, rising consumer confidence and the Federal Reserve’s stimulus actions, which have helped lower borrowing costs and lift the stock market.
“All things considered, 165,000 isn’t the biggest monthly gain in payrolls you’ll ever see, but it’s enough to assuage concerns that the economy had stalled again,” said Paul Ashworth, an economist at Capital Economics.
The Labor Department revised upward its estimate of job gains in February and March by a combined 114,000. It now says employers added 332,000 jobs in February and 138,000 in March.
The economy has created an average of 208,000 jobs a month from November through April — well above the monthly average of 138,000 for the previous six months.
The unemployment rate edged down from 7.6 percent in March and has fallen 0.4 percentage point since the start of the year, though it remains high.
One cautionary note in the employment report: Most of the biggest job gains were in lower-paying fields, such as hotels and restaurants, which added 45,000 jobs, and retail, which added 29,000. Temporary-help firms gained 31,000 positions.
By contrast, construction companies and governments cut jobs. Manufacturing employment was flat.