Wall Street Rises Toward Records 05/07 09:34
Stocks are rallying toward records on Wall Street Friday despite a grim
report that showed hiring fell off sharply across the country last month.
NEW YORK (AP) -- Stocks are rallying toward records on Wall Street Friday
despite a grim report that showed hiring fell off sharply across the country
The S&P 500 rose 0.8% in morning trading, above the 4,233 level. If it stays
there, it would top its record of 4,211.47 set at the end of last month. The
Dow Jones Industrial Average was up 167 points, or 0.5%, at 34,713, as of 10:14
a.m. Eastern time, and the Nasdaq composite was 1.2% higher.
Voices up and down Wall Street acknowledged that Friday morning's jobs
report was a massive disappointment. It's usually the market's most anticipated
economic data of each month, and it showed employers added just 266,000 jobs in
April. That was far less than the 975,000 jobs that economists expected and a
steep slowdown from March's hiring pace of 770,000.
The weak report jolted the bond market and sent yields tumbling. The yield
on the 10-year Treasury briefly dropped below 1.49%, to its lowest level in two
months before recovering, down from 1.56% late Thursday.
But even with April's sharp slowdown in hiring, many analysts said they
nevertheless expect the economy to continue to strengthen as coronavirus
vaccinations keep rolling out. The weak numbers also bolster the case for the
Federal Reserve to continue its policies to keep interest rates low in hopes of
helping the jobs market heal.
Low rates have been a huge reason for the stock market's surge to records
from its pandemic low in March 2020. One of the market's biggest fears in
recent months has been that a supercharged economy could lead to higher,
lasting inflation that would force the Federal Reserve to pull back on its
Stocks that have benefited most from low rates, including high-growth tech
companies, helped lead the market on Friday. Microsoft rose 1.2%, and Adobe
rose 2.4% as the tech sector alone accounted for nearly half of the S&P 500's
Strong earnings reports also helped to boost the market, as companies
continue to turn in blockbuster results for the first three months of the year.
Expedia rose 7.6% for the biggest gain in the S&P 500 after reporting a loss
for the first quarter that wasn't as bad as Wall Street expected, and it had
better revenue than forecast.
On the losing side, though, were banks and other companies hurt by the drop
in Treasury yields. Zions Bancorp. slipped 1.5%, and First Republic Bank lost
1.4%, as financial stocks in the S&P 500 dipped 0.3%. It was the only one of
the 11 sectors that make up the index to fall.
The yield in the 10-year Treasury recovered a bit after its initial tumble
following the release of the jobs report, and it was at 1.53% in morning
The lower-than-expected hiring figures seemed to calm some of the inflation
fears that have overhung markets for weeks, although the report also showed
that average wages rose more than expected.
In European stock, France's CAC 40 rose 0.2%, while Germany's DAX returned
1.1%. The FTSE 100 in London gained 0.8%.
In Asia, stocks in Shanghai fell 0.7% and Hong Kong's Hang Seng slipped 0.1%.
China reported its trade with the United States and the rest of the world
surged by double digits in April as consumer demand recovered, but growth
appeared to be slowing.
Japan's benchmark Nikkei 225 recouped early losses to edge up nearly 0.1%,
while South Korea's Kospi gained 0.6%.
Japan has decided to extend its state of emergency to curb the spread of
COVID-19 infections, which kicked in last month in some urban areas, with
people asked to stay home and restaurants to close early. The emergency will
continue through the end of the month, instead of ending May 11, officials said.
Worries are growing that Japan's medical system is being stretched thin,
straining its ability to roll out vaccinations and treat rising numbers of
infections. About 2% of the 126 million people in Japan have been inoculated so
far. Opposition is growing against the Tokyo Olympics, set to open in July,
with doubts growing whether the government can make good on its promise to have
the elderly vaccinated by then.