VOL. 41 | NO. 27 | Friday, July 7, 2017
Solid June jobs report gets tech and consumer stocks jumping
NEW YORK (AP) — U.S. stocks climbed Friday after the government said hiring grew at a stronger pace in June. Technology and consumer-focused companies led the way as investors were glad to see a positive sign for the economy.
The Labor Department said American employers added 222,000 jobs last month. That was more than analysts had expected, and it came just a day after a survey that showed weaker job creation by private companies. Stocks regained much of the ground they lost Thursday. Technology companies jumped and retailers like Amazon and McDonald's traded higher. Bond yields climbed and the dollar got stronger. Gold fell.
"The data itself shows a pretty strong labor market," said Sean Lynch, co-head of global equity strategy for the Wells Fargo Investment Institute. He said it "probably lays to rest some of the worries (that) we were taking a step back from an economic standpoint."
The Standard & Poor's 500 index picked up 15.43 points, or 0.6 percent, to 2,425.18. The Dow Jones industrial average gained 94.30 points, or 0.4 percent, to 21,414.34. It fell 158 points a day earlier. The Nasdaq composite rose 63.61 points, or 1 percent, to 6,153.08. The Russell 2000 index of smaller-company stocks added 15.02 points, or 1.1 percent, to 1,415.84.
The government said more people looked for work in June, which pushed the unemployment rate slightly higher. The government also raised its estimates of job gains in April and May. However average wage growth remained modest. Still, companies that would benefit from better economic growth, like banks and industrial companies, made strong gains.
Facebook added $2.62, or 1.8 percent, to $151.44 and Microsoft rose 89 cents, or 1.3 percent, to $69.46 as technology companies made the biggest gains Friday. They have done better than any other industrial group within the S&P 500 this year.
Despite Friday's gains, technology stocks have had a bad month. The Nasdaq composite closed at an all-time high June 8 and the S&P 500 technology index closed at a 17-year-high. Since then the tech index has dropped 4 percent, its worst one-month stretch since Britain voted to leave the European Union last June. Apple and Alphabet, Google's parent company, have both fallen almost 8 percent in that time, while chipmaker Nvidia is down 10 percent and smaller chip and chip equipment companies have taken even sharper losses.
"If the markets are to go higher, it's got to come from somewhere other than technology," said Lynch.
McDonald's rose $3.18, or 2.1 percent, to $156.27. Amazon picked up $13.62, or 1.4 percent, to $978.76 and Netflix advanced $3.93, or 2.7 percent, to $150.18. Homebuilder D.R. Horton added $1.30, or 3.8 percent, to $35.79.
Stocks dropped Thursday after ADP, a payroll processor, released a survey that showed sluggish hiring by private businesses. Investors have been worried that rising interest rates in the U.S., and possibly in Europe, will affect economic growth, while the end of stimulus measures by the Federal Reserve and European Central Bank could affect stocks, as they have helped support stock markets since the financial crisis in 2008-09.
Benchmark U.S. crude oil lost $1.29, or 2.8 percent, to $44.23 a barrel in New York. Brent crude, used to price international oils, fell $1.40, or 2.9 percent, to $46.71 per barrel in London. Analysts said investors are focused on the strong increase in U.S. production in Thursday's energy supply report. Hess fell $1.04, or 2.4 percent, to $41.79 and Devon Energy gave up 64 cents, or 2.1 percent, to $29.54.
Bond prices fell. The yield on the 10-year Treasury note rose to 2.39 percent from 2.37 percent. Big-dividend stocks like phone companies, household goods makers and utilities mostly lagged the market as investors who sought yield were lured elsewhere.
Advisory Board jumped after Bloomberg said health insurer UnitedHealth Group and private equity firm Vista Equity plan to buy the consulting company and break it up. Advisory Board shares climbed $2.90, or 5.4 percent, to $57.10. Investors currently value the company at about $2.3 billion. UnitedHealth gained $1.02 to $187.96.
Mobile services company Synchronoss Technologies climbed after it said it will review its options, which could include a sale of the company. Siris Capital Group offered to buy the company in late June for $18 a share. The stock climbed 64 cents, or 4 percent, to $16.50.
The dollar rose to 113.99 yen from 113.26 yen. The euro fell to $1.1404 from $1.1423.
Meanwhile gold sank $13.60, or 1.1 percent, to a four-month low of $1,209.70 an ounce. Silver dropped 56 cents, or 3.5 percent, to $15.43 an ounce. Copper lost 1 cent to $2.65 a pound.
In other energy trading, wholesale gasoline fell 3 cents to $1.50 a gallon. Heating oil shed 3 cents to $1.45 a gallon. Natural gas dipped 2 cents to $2.86 per 1,000 cubic feet.
The French CAC 40 lost 0.1 percent. Germany's DAX added 0.1 percent and the FTSE 100 of Britain gained 0.2 percent. Japan's Nikkei 225 lost 0.3 percent and South Korea's Kospi fell 0.3 percent. Hong Kong's Hang Seng index dropped 0.5 percent.
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AP Markets Writer Marley Jay can be reached at http://twitter.com/MarleyJayAP His work can be found at https://apnews.com/search/marley%20jay