Tech leads Wall Street's advance after strong jobs data
(Reuters) - Wall Street stocks rose on Friday after the latest monthly jobs report pointed to strength in the U.S. economy and geopolitical tensions eased.
Technology stocks led the rally, with gains in heavyweight companies such as Apple (AAPL.O), Microsoft (MSFT.O) and Alphabet (GOOGL.O) lifting the S&P 500 tech index .SPLRCT to a record high.
Government data showed that in May the U.S. economy added 223,000 nonfarm jobs and average hourly wages increased 0.3 percent, both topping economist 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 euro.
Further calming geopolitical concerns, U.S. President Donald Trump announced the resumption of plans for a summit with North Korea’s 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 in San Francisco. “It’s good news for the market.”
The Dow Jones Industrial Average .DJI rose 219.37 points, or 0.9 percent, to 24,635.21, the S&P 500 .SPX gained 29.35 points, or 1.08 percent, to 2,734.62 and the Nasdaq Composite .IXIC added 112.22 points, or 1.51 percent, to 7,554.33.
The Cboe Volatility index .VIX, 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.
In the view of some investors, the strong economic data raised the likelihood the Federal Reserve will raise interest rates four times this year. Concerns that rising rates will dampen future growth have sent U.S. stocks tumbling on several occasions this year. But 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 European Union.
Canada and Mexico retaliated, targeting U.S. steel and aluminum imports and products such as whiskey and blue jeans.
Tech stocks, which led gains on Friday, may be somewhat insulated from those trade risks. The Nasdaq was just over 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 in Atlanta.
Advancing issues outnumbered declining ones on the NYSE 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 U.S. exchanges was 7.04 billion shares, compared with the 6.61 billion average for the full session over the last 20 trading days.
Additional reporting by Medha Singh in Bengaluru; Editing by Arun Koyyur, Nick Zieminski and Susan Thomas
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