US stocks surged on Friday, finishing just short of record highs, as investors responded enthusiastically to a strong job market report for last month.
The buying accelerated throughout the day after the US Department of Labor said US employers added 287,000 jobs last month. That was far more than analysts expected, and after weak reports from April and May, it suggests the economy and job market have not run out of steam.
“It was a strong report and it put to bed worries that we were seeing the job market sputter,” Edward Jones investment strategist Kate Warne said.
Mining and materials companies, which would stand to benefit more than other industries from an accelerating economy, took the biggest gains. Machinery makers also jumped. Only eight stocks on the Standard & Poor’s 500 finished lower.
The Dow Jones Industrial Average surged 250.86 points, or 1.4 percent, to 18,146.74. The S&P 500 rose 32 points, or 1.5 percent, to 2,129.90. The NASDAQ composite advanced 79.95 points, or 1.6 percent, to 4,956.76.
The government said the unemployment rate rose slightly as more people looked for jobs. There was also evidence wages were rising faster. The April and May reports worried investors, in part because they came after the economy grew just 1.1 percent over the first three months of the year. The US economy has been growing for more than six years and investors are wary that streak could end.
Among material and industrial companies, paint and coatings maker PPG Industries added US$3.29, or 3.2 percent, to US$106.32, and aluminum producer Alcoa picked up US$0.48, or 5.2 percent, to US$9.82. Machinery maker Caterpillar climbed US$2.32, or 3.1 percent, to US$77.37, and aerospace company Boeing gained US$2.92, or 2.3 percent, to US$130.09.
Retailer Gap climbed after it said sales at stores open at least a year grew last month, as Old Navy results improved. Sales at those stores are considered an important measure of retailers’ results, and Thomson Reuters said it was the first improvement in that gauge for Gap in more than a year. Analysts expected another decline this month.
Gap stock rose US$1.07, or 4.9 percent, to US$22.70. The stock is down 8 percent this year.
Videoconferencing equipment maker Polycom said it would be taken private by Siris Capital. It accepted an offer from Siris worth US$12.50 per share, or US$1.7 billion. Polycom accepted an offer from Mitel Networks in April. Polycom stock gained US$1.38, or 12.7 percent, to US$12.25. Mitel, which will get a US$60 million payment from Polycom, climbed US$1.19, or 19.8 percent, to US$7.21.
The S&P 500 is less than 1 point away from the record high it set in May last year. The Dow, too, is close to a record. They reached those peaks before investors got very worried about the slowdown in China’s economy, before the US Federal Reserve started raising interest rates for the first time in almost nine years, and before anyone thought Britain might really vote to leave the EU.
While all of those concerns have hurt stocks, they have recovered. However, it has been a very careful, uneasy rally. The stocks that have done the best in the last year telcos and utilities, which pay big dividends and are considered safe. US bond yields have set all-time lows in the last few days.
US economic growth has been steady, but uninspiring, and corporate profits and revenues are in a slump. However, the alternatives do not look any better. China has been shaky. The economies of Japan and Europe are weak, and the yields on some European bonds are negative as nations try to boost their economic growth. That means investors have to pay to own those bonds. So even if US stocks are not setting the world alight, they have been good enough.
“I don’t think investors are nearly as excited as they would typically be in an environment where stocks are close to record highs,” Warne said.
The yield on the 10-year Treasury note fell to 1.36 percent from 1.39 percent. That is far below the 2.29 percent level it began the year at. When demand for bonds is high, their prices rise and yields fall. That has the effect of sending interest rates on many kinds of loans, including mortgages, lower, since those rates are tied to bond yields.
Drug developer Juno Therapeutics said it halted a mid-stage study on a potential leukemia treatment following the deaths of two patients. The study involved the firm’s most advanced experimental drug, and Juno said the deaths of the patients came after an additional chemotherapy drug was added to their treatment. The stock sank US$13.01, or 31.9 percent, to US$27.81.
Among the rows of vibrators, rubber torsos and leather harnesses at a Chinese sex toys exhibition in Shanghai this weekend, the beginnings of an artificial intelligence (AI)-driven shift in the industry quietly pulsed. China manufactures about 70 percent of the world’s sex toys, most of it the “hardware” on display at the fair — whether that be technicolor tentacled dildos or hyper-realistic personalized silicone dolls. Yet smart toys have been rising in popularity for some time. Many major European and US brands already offer tech-enhanced products that can enable long-distance love, monitor well-being and even bring people one step closer to
Malaysia’s leader yesterday announced plans to build a massive semiconductor design park, aiming to boost the Southeast Asian nation’s role in the global chip industry. A prominent player in the semiconductor industry for decades, Malaysia accounts for an estimated 13 percent of global back-end manufacturing, according to German tech giant Bosch. Now it wants to go beyond production and emerge as a chip design powerhouse too, Malaysian Prime Minister Anwar Ibrahim said. “I am pleased to announce the largest IC (integrated circuit) Design Park in Southeast Asia, that will house world-class anchor tenants and collaborate with global companies such as Arm [Holdings PLC],”
Sales in the retail, and food and beverage sectors last month continued to rise, increasing 0.7 percent and 13.6 percent respectively from a year earlier, setting record highs for the month of March, the Ministry of Economic Affairs said yesterday. Sales in the wholesale sector also grew last month by 4.6 annually, mainly due to the business opportunities for emerging applications related to artificial intelligence (AI) and high-performance computing technologies, the ministry said in a report. The ministry forecast that retail, and food and beverage sales this month would retain their growth momentum as the former would benefit from Tomb Sweeping Day
Thousands of parents in Singapore are furious after a Cordlife Group Ltd (康盛人生集團), a major operator of cord blood banks in Asia, irreparably damaged their children’s samples through improper handling, with some now pursuing legal action. The ongoing case, one of the worst to hit the largely untested industry, has renewed concerns over companies marketing themselves to anxious parents with mostly unproven assurances. This has implications across the region, given Cordlife’s operations in Hong Kong, Macau, Indonesia, the Philippines and India. The parents paid for years to have their infants’ cord blood stored, with the understanding that the stem cells they contained