Markets |
S&P 500 brushes record high after blowout
jobs report
DJ: 18,146.74 +250.86 NAS: 4,956.76
+79.95 S&P: 2,129.90
+32.00
(Reuters) The benchmark S&P 500 stock index brushed
against its record closing high on Friday as Wall Street rallied after a
much-larger-than-expected jump in jobs growth confirmed the U.S. economy has
regained speed after a first-quarter lull.
The S&P briefly traded above its record close but ended less
than a point below it and was three points away from the all-time intraday high
of 2,134.72 reached in May 2015. On a total return basis, including reinvested
dividends, the S&P 500 .SPXT ended at a record high.
After a dismal payrolls report for May that raised concerns
about the health of the economy, U.S. employers added 287,000 jobs in June, beating market
expectations for the first time in four months.
"The equity market
is telling you the second quarter economy looks better than the first
quarter," said Art Hogan, chief market strategist at Wunderlich
Securities in New York. He said if earnings season, which begins in
earnest next week, provides investors with a strong outlook, the S&P
will likely break the record and has a chance at rallying from there.
"The old high has been resistance and if you break it and
see earnings growth and relatively good guidance, people will probably try to
get in front of that," said Hogan.
Some analysts said the strong jobs number could put an interest
rate hike from the Federal Reserve back on the table, even as concerns linger
over the global economic impact from Britain's vote last month to leave the
European Union.
Financial stocks on the S&P 500 .SPSY, which would benefit
from a rate hike, gained 1.8 percent. Wells Fargo (WFC.N) and
JPMorgan (JPM.N) were
among the biggest boosts to the broad index, while Goldman Sachs' (GS.N) 2.3
percent rise provided the biggest boost to the Dow.
The Dow Jones industrial
average .DJI closed 250.86 points, or 1.4 percent,
higher at 18,146.74; the S&P 500 .SPX gained 32 points, or 1.53 percent, to
2,129.9 and the Nasdaq Composite .IXIC added 79.95 points, or 1.64 percent, to
4,956.76.
The S&P hit a session high of 2,131.71, briefly trading
above its record closing high of 2,130.82 set in May 2015.
For the week, the three major indexes posted gains of more than
1 percent.
All major S&P 500 sectors were higher, led by gains in
materials .SPLRCM and industrials .SPLRCI, which tend to outperform when the
economy is seen expanding.
The CBOE Volatility index .VIX, Wall Street's "fear gauge", which
has swung wildly since the June 23 vote by Britons to leave the European Union,
ended at its lowest since
late May.
However some investors remained concerned about the effects of
"Brexit" and the upcoming earnings season. Near record lows in 10-
and 30-year U.S. government bond yields US10YT=RR US30YT=RR underscored those
concerns.
"I am maintaining a cautious outlook for the next couple of
months," said Phil Orlando, chief equity market strategist at Federated Investors
in New York, citing Brexit, uncertainty about rate hikes and the November U.S.
presidential election.
"I think investors are just whistling past the graveyard
here; there is a lot of ugly stuff on the horizon that everyone is just sort of
ignoring. It just strikes me there are just too many things that can go wrong
over the next couple of months."
Advancing issues outnumbered declining ones on the NYSE by a
8.01-to-1 ratio; on Nasdaq, a 4.90-to-1 ratio favored advancers.
The S&P 500 posted 61 new 52-week highs and one new low; the
Nasdaq Composite recorded 126 new highs and 14 new lows.
About 7.1
billion shares changed hands in U.S. exchanges, compared with the 7.79
billion daily average over the past 20 sessions.
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