US stocks rose on Friday, heading for modest weekly gains, after the monthly jobs report showed the labor market continued its slow recovery in May.
The Dow Jones Industrial Average gained 131 points, or 0.4%, to 34,708, while the S&P 500 gained 0.8%. Both indices are hovering just below their all-time highs for the close. The Nasdaq Composite rose 1.4%.
Friday’s gains put US stocks on track to post moderate gains for the week, even after a pullback in healthcare and consumer discretionary stocks partially offset large gains in other sectors.
One factor that has helped allay the concerns of some investors: May’s jobs report. Data from the Department of Labor showed that the US economy created slightly fewer jobs than economists expected, while the unemployment rate fell more than expected. Together, the mixed data has offered investors a takeaway: The job market is improving, but not at a pace that will force the Federal Reserve to rush to cut further support to the economy.
“Nothing from today will move the Fed’s needle anytime soon,” said James McCann, deputy chief economist at Aberdeen Standard Investments, in comments sent via email.
Barring a sustained recovery in wage pressures, “the Fed remains convinced that short-term price pressures will not last, suggesting that rates will be suspended until 2023 with no unpleasant surprises,” McCann said.
In bond markets, the yield on the 10-year US Treasury bill fell to 1.553% from 1.624% on Thursday. Investors had said that a better-than-expected jobs report could prompt them to sell safe government bonds, while the reverse could lead to buying. Yields fall as bond prices rise.
Fiscal and monetary policy is considered to have been crucial in propelling the stock market’s recovery and rally to levels not seen since the pandemic struck last spring. Investors said any indication the Fed may end its support could lead to equity volatility.
“The simple act of printing money and pumping it into the system has been a big boost to the markets, and the second you take the markets out of it, that means the markets need to be more self-sufficient,” said Hani Redha, portfolio manager at PineBridge Investments. “It’s kind of a coming-off-morphine type of experience.”
Meanwhile, the volatile trading in the same stocks that caught the attention of individual investors persisted through Friday.
AMC Entertainment Holdings shares rose 3% after fluctuating between gains and losses. Shares ended Thursday’s wild trading session down 18% after the theater operator said he plans to sell more shares, while warning potential buyers of his shares that they could lose all their money. GameStop fell 1.5%, wiping out earlier gains.
Shares of Pershing Square Tontine Holdings fell 14% after the blank check company run by hedge fund billionaire William Ackman confirmed it was in talks to acquire a stake in Universal Music Group.
Ford Motor shares rose 0.3%, extending Thursday’s gains, after the automaker said total U.S. sales in May rose as higher sales of SUVs and electrified vehicles offset declining sales of trucks and cars.
Overseas, the pancontinental Stoxx Europe 600 rose 0.4%. In Asia, the major benchmarks were mixed. The Shanghai Composite Index rose 0.2%. Japan’s Nikkei 225 fell 0.4% and the Hong Kong Hang Seng index fell 0.2%.
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