The Financial Express

US stocks end record highs

| Updated: October 21, 2017 11:47:29

US stocks end record highs

US stocks closed at record levels for a second consecutive session on Friday, as gains in technology and industrial stocks more than offset a lukewarm jobs report.

Nonfarm payrolls increased by 138,000 in May, well short of the 185,000 expected by economists. The prior two months were revised lower by 66,000 jobs than previously reported.

Average hourly earnings rose 0.2 per cent in May, following a similar gain in April, but the unemployment rate fell to a 16-year low of 4.3 per cent.

Despite the disappointing data, market participants still largely anticipate the Federal Reserve to raise rates at its June 13-14 meeting, with traders expecting a 90.7-per cent chance of a quarter-point hike, according to Thomson Reuters data.

The economy needs to create 75,000 to 100,000 jobs per month to keep up with growth in the working-age population. Job gains are slowing as the labour market nears full employment.

The Dow Jones Industrial Average rose 62.11 points, or 0.29 per cent, to 21,206.29, the S&P 500 gained 9.01 points, or 0.37 per cent, to 2,439.07 and the Nasdaq Composite added 58.97 points, or 0.94 per cent, to 6,305.80.

For the week, the S&P rose 0.95 per cent, the Dow added 0.59 per cent and the Nasdaq gained 1.54 per cent.

Industrials, up 0.49 per cent, and technology, up 1.04 per cent, were the best performing sectors. The tech sector has been the top performer among the major S&P sectors, with a 2017 gain of 21.26 per cent.

The tech sector was led by Broadcom, which rose more than 8.0 per cent to hit an all-time high of $253.76, after the chipmaker's quarterly results beat analysts' expectations.

Shares of financials, which benefit from higher interest rates, fell as much as 0.9 per cent after the jobs data sparked some worry the Fed could become cautious after the June meeting, and closed down 0.37 per cent.

Energy was the worst-performing sector, down 1.18 per cent. Lululemon Athletica jumped 11.5 per cent to $54.29 after the athletic apparel maker's quarterly profit beat estimates, according to Reuters.

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