Stocks take foot off gas; S&P 500 ekes out 6th straight gain

Wall Street’s big rally let off the accelerator on Friday, despite a better-than-expected report on the U.S. job market, amid worries about worsening U.S.-China tensions and whether Washington can deliver more aid for the economy.

The Standard & Poor’s 500 inched up 2.12 points, or 0.1%, to 3,351.28 to eke out a sixth straight gain, after being down most of the day. It’s back within 1% of its record for the first time since February. The Dow Jones industrial average added 46.50 points, or 0.2%, to 27,433.48.

Technology stocks fell, though, on worries that China could retaliate for President Trump’s latest escalation against Chinese tech companies. The Nasdaq composite dropped 97.09 points, or 0.9%, to 11,010.98 after setting a record Thursday. It’s a rare stumble for big tech stocks, which have soared on expectations they can keep raking in profits regardless of the pandemic.

The day’s headline economic report was an encouraging one for investors: Employers added nearly 1.8 million jobs last month, about 185,000 more than economists had forecast. Analysts said they found some encouraging trends throughout the report, such as a stronger-than-expected rise in average hourly earnings.

Several areas of the market that tend to rise when investors upgrade their economic expectations rallied.

Stocks of smaller companies climbed more than their bigger rivals, and the Russell 2000 index of small-cap stocks jumped 24.56 points, or 1.6%, to 1,569.18. Treasury yields also rose. Financial stocks had the biggest gain of the 11 sectors that make up the S&P 500. Seven out of 10 stocks in the index rose for the day.

Still, the jobs report also showed that hiring slowed in July after two months of acceleration, and the job market remains far below where it was before the pandemic.

Analysts said the betterthan-expected jobs report may have removed some of the urgency from talks on Capitol Hill, where Congress and White House officials have been negotiating on a hoped-for deal on more aid for the economy. They had set an informal Friday deadline to reach the outlines of an agreement, but Treasury Secretary Steven T. Mnuchin came out of talks Friday saying no progress was made.

The market also focused on Trump’s order for a sweeping but vague ban on dealings with the Chinese owners of popular apps TikTok and WeChat.

The escalating U.S.China tensions helped send tech stocks in the S&P 500 down 1.6% on Friday, more than quintuple the loss of any of the other 10 sectors that make up the index.

The yield on the 10-year Treasury rose to 0.56% from 0.53% late Thursday.

Benchmark U.S. crude fell 73 cents to settle at $41.22 a barrel. Brent crude, the international standard, lost 69 cents to $44.40 a barrel.