US stocks extended a seven-week rally on Friday after upbeat US jobs and factory data hinted at stronger corporate earnings without increasing concerns of potential US interest rate hikes.
The US Department of Labor’s report showed solid gains in nonfarm payrolls last month, while the unemployment rate rose to 5 percent from an eight-year low of 4.9 percent as more Americans entered the labor force.
Along with another report showing the US manufacturing sector resumed growth last month, the employment data suggested the economy was not growing fast enough to increase concerns about inflation.
“It’s a very solid number overall, but I don’t think it changes anything as far as the Fed’s outlook,” said Jon Adams, a senior investment strategist and portfolio manager at BMO in Chicago.
Stock gains were limited by a 1.39 percent drop in the S&P 500 energy sector, as oil prices tumbled nearly 4 percent amid increasing skepticism about a deal to freeze crude production.
Since the middle of February, the S&P has surged 13 percent, recovering from deep losses thanks to a stabilization of oil prices and reduced concerns about a stumble in China’s economy and its potential fallout in the US.
Investors have been concerned about tepid corporate earnings and are keeping a close eye on the quarterly reports that start rolling in coming weeks.
Analysts expect S&P 500 companies’ first-quarter earnings to fall 7 percent year over year, with energy companies weighing heavily, according to Thomson Reuters data.
“We don’t think P/E [price/earnings] ratios are going anywhere,” Fort Pitt Capital Group chief investment officer Charlie Smith said, adding that he believed the S&P 500 was fairly valued. “For this year, we think it’s going to be a tough slog.”
The Dow Jones Industrial Average rose 0.61 percent to end at 17,792.75 points and the S&P 500 gained 0.63 percent to 2,072.78,
The NASDAQ Composite added 0.92 percent to 4,914.54.
For the week, the S&P climbed 1.8 percent, the Dow added 1.6 percent and the NASDAQ jumped 3 percent.
On Friday, eight of the 10 major S&P sectors were higher. The healthcare sector rose 1.27 percent, boosted by Regeneron.
The drugmaker’s shares surged 12.43 percent after its experimental treatment for eczema was found highly effective in two large studies.
Chevron lost 1.19 percent and weighed the most on the Dow, while Exxon fell 0.75 percent and was the biggest drag on the S&P.
Marriott fell 5.68 percent after China’s Anbang Insurance Group Co (安邦保險集團) abandoned its competing US$14 billion bid for Starwood Hotels. Starwood lost 4.85 percent.
Although the major indices closed higher, decliners outnumbered advancers on the NYSE by 1,576 to 1,448. On the NASDAQ, 1,591 issues rose and 1,193 fell.
The S&P 500 index showed 70 new 52-week highs and two new lows, while the NASDAQ recorded 61 new highs and 20 new lows.
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