Market Overview

Dow, S&P 500 hit record highs after strong jobs report

Dow, S&P 500 hit record highs after strong jobs report

Stocks tied to the economic recovery rose after a stronger-than-expected jobs report on Friday, sending two key market averages to all-time highs. The Dow Jones Industrial Average rose 133 points, or 0.4%, and hit an intraday record high. The S&P 500 rose 0.2% for its own intraday all-time high, while the tech-heavy Nasdaq Composite was down 0.3%.

Friday’s jobs report showed that the U.S. economy added 943,000 jobs in July, according to the Labor Department. Economists expected the economy to have added 845,000 jobs last month, according to estimates from Dow Jones. The unemployment rate dropped to 5.4%, below the estimate of 5.7%.

Bank shares led the gains post-jobs report as rates shot higher, increasing their profitability prospects. JPMorgan, Bank of America and Wells Fargo all gained more than 1% in early trading. Industrials, retailers and energy stocks also gained as the jobs report soothed concerns about the economic comeback.

On the flip side, tech shares declined as the jump in rates caused investors to take profits in the names and move back into stocks that could benefit more from faster economic growth. Amazon, Apple and Salesforce were trading down slightly in early trading. Higher rates can also expose tech stock lofty valuations.

Friday’s report comes after the weekly initial claims number reported on Thursday came in at 385,000, which was in-line with expectations. However, the ADP private payrolls report on Wednesday showed a smaller-than-expected number of jobs added during July.

Wall Street is closely watching Friday’s jobs report given its potential to impact the Federal Reserve’s policy going forward. Fed Governor Christopher Waller told CNBC on Monday that he would advocate for the central bank to taper its asset purchases if the next two jobs reports showed a healthy recovery.

Dow, S&P 500 hit record highs after strong jobs report, CNBC, Aug 6

Article Rating
Rate this post