S&P 500 ekes out 6th straight gain following jobs report
NEW YORK — 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 S&P 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, or 0.2%, to 27,433.48.
Technology stocks fell, though, on worries that China could retaliate for President Donald Trump’s latest escalation against Chinese tech companies. The Nasdaq composite dropped 97.09, 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.
“Yes, future employment data will likely slow due to more COVID-19 restrictions, but for now you have to be quite impressed with how far we’ve come the last few months,” Ryan Detrick, chief investment strategist for LPL Financial, said in a statement.
Several areas of the market that tend to rise when investor upgrade their expectations for the economy rallied.
Stocks of smaller companies climbed more than their bigger rivals, and the Russell 2000 index of small-cap stocks jumped 24.56, or 1.6%, to 1,569.18. Treasury yields also rose. Financial stocks, which have swung sharply with prospects for the economy and interest rates, had the biggest gain of the 11 sectors that make up the S&P 500. Seven out of 10 stocks within 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 better-than-expected jobs report may also 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, including benefits for unemployed workers, and Treasury Secretary Steven Mnuchin came out of talks Friday saying no progress was made.
Mnuchin said Trump is considering executive orders to address some of the issues without Congress, but critics question how much impact they would have.
Investors say Washington needs to act quickly because $600 in weekly unemployment benefits from the federal government just expired. The economy has shown signs of improvement since the spring but is still hobbling, and concerns are rising that it could backtrack amid a resurgence in coronavirus counts.
Benchmark U.S. crude fell 73 cents to settle at $41.22 per barrel. Brent crude, the international standard, lost 69 cents to $44.40 a barrel.