A better-than-expected jobs report for July from the U.S. Department of Labor sent two stock indices into record territory on Friday.
The Dow Jones Industrial Average climbed nearly 200 points by Friday afternoon (to close at 18,543.53), nudging the index into positive ground for the week. The S&P 500 and Nasdaq both reached record highs Friday at 2,182.86 and 5,221.12, respectively. It was the Nasdaq’s first record high since July 2015.
The biggest gainers Friday for the Dow were pharmaceutical giant Merck and investment house Goldman Sachs, CNBC reported.
The momentum on Wall Street Friday was carried by a positive jobs report for July, which saw about 255,000 created for the month — far above the 180,000-190,000 range analysts expected — and the unemployment rate under 5 percent.
“American businesses have created a total of 15 million jobs since February 2010,” U.S. Labor Secretary Thomas Perez said in a statement Friday. “This month’s report confirms that the Great Recession is indeed in the nation’s rear-view mirror.”
Perez also noted the importance of the 2016 presidential election in the maintenance of economic growth, as well as other issues consumers view as highly significant.
“With fewer than 200 days left in this administration, we remain as committed as ever to ensuring that the prosperity we’ve created in the last eight years is sustained and broadly shared,” he said.
“We must raise the federal minimum wage so that no one who works full-time in America lives in poverty. We must expand access to paid leave so that people don’t have to choose between the job they need and the family they love. We must continue to invest in our most precious natural resource — our human capital — so that everyone gets the skills and training they need to compete.”
Gold futures fell, the value of the U.S. dollar rose, and American government bonds pulled back Friday.
“After three weeks of stocks not doing much … this is the catalyst for stocks to continue higher,” Edward Jones analyst Kate Warne said. “I think it puts to bed fears of a faltering economy.”
Stocks have also generally benefited from the U.S. Federal Reserve’s decision last week to leave interest rates alone and still unchanged for 2016.
“Today, the good news is actually good news” analyst Jeff Carbone said, noting that uncertainty surrounding Britain’s exit from the European Union will likely be the biggest factor in the Fed’s deciding whether to raise rates before the end of the year.
“Just seven years since the auto industry was on life support, auto sales remain near record highs,” Perez added. “We have seen 74 consecutive weeks of initial unemployment claims at or below 300,000. The last time we saw a streak like that was December 1973.”
Friday marked the second straight month that U.S. markets received a substantial boost from better-than-expected Labor statistics, after a lackluster jobs report for May dinged indices.
[Source:- UPI]
