Sun, Jun 03, 2018 - Page 14 News List

Tech lifts Wall St after strong jobs data

‘GOOD NEWS’:The US last month added 223,000 non-farm jobs while the jobless rate fell to an 18-year low, raising chances that the Fed will hike interest rates four times this year

Reuters

Wall Street stocks on Friday rose after the latest monthly US jobs report pointed to strength in the US economy and geopolitical tensions eased.

Technology stocks led the rally, with gains in heavyweight companies, such as Apple Inc, Microsoft Corp and Alphabet Inc lifting the S&P 500 tech index to a record high.

US government data showed that last month the US economy added 223,000 non-farm jobs and average hourly wages increased 0.3 percent, both topping economists’ estimates.

The unemployment rate fell to an 18-year low of 3.8 percent. Data on construction spending and industrial production also pointed to accelerating economic growth.

Markets got a reprieve as Italy installed a coalition government, removing the risk of a repeat vote dominated by debate on whether the country would quit the eurozone.

Further calming geopolitical concerns, US President Donald Trump announced the resumption of plans for a summit with North Korean leader Kim Jong-un on June 12.

“The Trump economy continues to work very, very well,” said Stephen Massocca, senior vice president at Wedbush Securities Inc in San Francisco. “It’s good news for the market.”

The Dow Jones Industrial Average on Friday rose 219.37 points, or 0.9 percent, to 24,635.21, the S&P 500 gained 29.35 points, or 1.08 percent, to 2,734.62 and the NASDAQ Composite added 112.22 points, or 1.51 percent, to 7,554.33.

The Cboe Volatility index, a barometer of expected near-term stock market gyrations, ended down at 13.46, its lowest closing level in a week.

For the week, the S&P rose 0.48 percent, the Dow lost 0.48 percent and the NASDAQ gained 1.62 percent.

The strong economic data raised the likelihood the US Federal Reserve will raise interest rates four times this year, some investors said.

Concerns that rising rates will dampen growth have sent US stocks tumbling on several occasions this year.

However, investors said they did not find Friday’s data concerning.

“The wage numbers were a little warm, but that wasn’t enough to spook people,” Massocca said.

However, investors are keeping an eye out on developments around trade after Washington imposed steel and aluminum tariffs on imports from Canada, Mexico and the EU.

Canada and Mexico retaliated, targeting US steel and aluminum imports and products such as whiskey and blue jeans.

Tech stocks, which led gains on Friday, might be somewhat insulated from those trade risks.

The NASDAQ was just more than 1 percent away from a record high as tech stocks largely cushioned the index in the past week even while the broader markets suffered.

By comparison, the S&P 500 was 4.8 percent off its Jan. 26 peak.

“Tech isn’t in the headlines as groups that are going to be impacted by what’s going on with regards to tariffs in the EU, whereas others are,” said Daniel Morgan, portfolio manager at Synovus Trust Co in Atlanta.

Advancing issues outnumbered declining ones on the New York Stock Exchange by a 2.47-to-1 ratio; on NASDAQ, a 2.41-to-1 ratio favored advancers.

The S&P 500 posted 28 new 52-week highs and eight new lows; the NASDAQ Composite recorded 181 new highs and 42 new lows.

Volume on US exchanges was 7.04 billion shares, compared with the 6.61 billion average for the full session over the past 20 trading days.

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