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Wall St. rises as jobs report supports upbeat economic outlook
U.S. stocks rose in a broad-based rally on Friday as stronger-than-expected job growth in April with muted wage gains left investors upbeat about the outlook for the economy and interest rates.
The Labor Department said employers added 263,000 jobs in April, which blew past expectations, and the unemployment rate dropped to a more than 49-year low of 3.6%.
Average hourly earnings came in just shy of expectations, indicating muted inflationary pressure.
The data supports the Federal Reserve`s patient stance toward raising interest rates, which is a positive for stocks.
"We continue to have stronger and stronger job growth, and it seems like there`s less and less inflation, which is really odd. You typically don`t see that, and basically what that signals to the market is that the Fed is on hold," said Jamie Cox, managing partner of Harris Financial Group in Richmond, Virginia.
"As long as inflation is below trend, that`s good. So if you have the Fed in a box, you have strong labor force gains, that could portend for better earnings in the future for companies," he said.
Boosting the S&P 500 and the Nasdaq, Amazon.com Inc rose 3.2%, after CNBC reported Warren Buffett`s Berkshire Hathaway Inc has bought shares of the internet retailing giant for the first time.
The consumer discretionary sector rose 1.5%, leading a rally among the 11 major S&P sectors.
The Dow Jones Industrial Average rose 202.6 points, or 0.77%, to 26,510.39, the S&P 500 gained 26.62 points, or 0.91%, to 2,944.14 and the Nasdaq Composite added 112.10 points, or 1.39%, to 8,148.87.
With nearly 400 S&P 500 companies reporting so far, three-quarters have topped profit estimates, according to Refinitiv data.
The upbeat reports have turned around the earnings estimate for the first quarter to an almost 1% rise compared with a 2% decline projected at the start of April.
Newell Brand Inc shares jumped after the consumer goods maker exceeded Wall Street expectations for quarterly adjusted profit as it benefited from cost savings and higher pricing.
Network gear-maker Arista Networks Inc tumbled after it forecast weak current-quarter revenue, while Activision Blizzard Inc fell after the videogame maker forecast current-quarter profit below expectations as it puts more money into its franchises to battle competition.
Advancing issues outnumbered declining ones on the NYSE by a 3.73-to-1 ratio; on Nasdaq, a 3.58-to-1 ratio favored advancers.
The S&P 500 posted 34 new 52-week highs and two new lows; the Nasdaq Composite recorded 82 new highs and 28 new lows.
(This article has not been edited by Zeebiz editorial team and is auto-generated from an agency feed.)
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