Tepid job news barely dents stock market advance
NEW YORK — A tepid jobs report on Friday barely dented a summer rally on the stock market.
The Standard & Poor's 500 index ended the week 1 percent higher after breaking through 1,700 points for the first time Thursday. The index has risen for five of the past six weeks.
The Dow Jones industrial average rose 0.6 percent and is on a streak of six weekly gains.
On Friday, indexes dropped in early trading as it was revealed that employers added fewer jobs than forecast in July, curbing optimism that the economy is poised to pick up strength in the second half of the year. The market gradually recovered throughout the day, and major indexes ended slightly higher. The gains were enough to set all-time highs for the Dow and S&P.
The government reported that 162,000 jobs were established last month, pushing the unemployment rate down to a 4½-year low of 7.4 percent. The number of jobs added was the lowest since March and below the 183,000 economists polled by FactSet were expecting.
Brad Sorensen, Charles Schwab's director of market and sector research, said the jobs report was “moderately disappointing.”
Investors have been watching economic reports closely and trying to anticipate when the Federal Reserve will start easing back on its economic stimulus. The central bank is buying $85 billion in bonds every month to keep long-term interest rates low and encourage borrowing.
While the jobs report wasn't encouraging, it did make it more likely that the Fed would take its time cutting back on stimulus, said Doug Lockwood of Hefty Wealth Partners. The stimulus from the central bank has been an important factor powering a four-year bull run in stocks.
“As long as there's this concept that the Fed may still need to be involved and stimulate, that's good for both the bond and the stock market,” Lockwood said.
The S&P 500 ended Friday up 2.80 points, or 0.2 percent, to 1,709.67. The index is up 6.4 percent since the start of July. The Dow Jones industrial average rose 30.34 points, or 0.2 percent, to 15,658.36.