US stocks closed at record levels for a second consecutive session on Friday, as gains in technology and industrial stocks more than offset a lukewarm US jobs report.
US non-farm payrolls increased by 138,000 last month, well short of the 185,000 expected by economists.
The prior two months were revised lower by 66,000 jobs than previously reported.
Photo: Bloomberg
Average hourly earnings rose 0.2 percent last month, following a similar gain in April, but the unemployment rate fell to a 16-year low of 4.3 percent.
Despite the disappointing data, market participants still largely anticipate the US Federal Reserve to raise rates at its June 13 and 14 meeting, with traders expecting a 90.7 percent chance of a quarter-point hike, according to Thomson Reuters data.
“It’s certainly surprising. It doesn’t really correlate well with virtually all the other data on the labor market that we’re seeing,” said Russell Price, senior economist at Ameriprise Financial Services Inc in Troy, Michigan.
However, the modest increase could raise concerns about the economy’s health after GDP growth slowed in the first quarter and a string of softening data this week, including reports on housing and auto sales.
The US economy needs to create 75,000 to 100,000 jobs per month to keep up with growth in the working-age population.
Job gains are slowing as the labor market nears full employment.
The Dow Jones Industrial Average on Friday rose 62.11 points, or 0.29 percent, to 21,206.29, the S&P 500 gained 9.01 points, or 0.37 percent, to 2,439.07 and the NASDAQ Composite added 58.97 points, or 0.94 percent, to 6,305.80.
For the week, the S&P rose 0.95 percent, the Dow added 0.59 percent and the NASDAQ gained 1.54 percent.
Industrials, up 0.49 percent, and technology, up 1.04 percent, were the best performing sectors.
The tech sector has been the top performer among the major S&P sectors, with a gain of 21.26 percent so far this year.
The tech sector was led by Broadcom Ltd, which rose more than 8 percent to hit an all-time high of US$253.76, after the chipmaker’s quarterly results beat analysts’ expectations.
Shares of financials, which benefit from higher interest rates, fell as much as 0.9 percent after the jobs data sparked some worry the Fed could become cautious after this month’s meeting, and closed down 0.37 percent.
Energy performed the worst, down 1.18 percent.
Brent oil tumbled below US$50 per barrel on worries that US President Donald Trump’s decision to abandon a climate pact could spark more crude drilling in the US and worsen a global glut.
Lululemon Athletica Inc jumped 11.5 percent to US$54.29 after the athletic apparel maker’s quarterly profit beat estimates.
Advancing issues outnumbered declining ones on the New York Stock Exchange by a 1.34-to-1 ratio; on NASDAQ, a 2.07-to-1 ratio favored advancers.
The S&P 500 posted 28 new 52-week highs and 11 new lows; the NASDAQ Composite recorded 82 new highs and 70 new lows.
About 6.37 billion shares changed hands in US exchanges on Friday, compared with the 6.65 billion daily average over the past 20 sessions.
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