Stocks set records again as bond yields sink after jobs report
Bond yields sank Friday to their lowest level of the year, and the dollar's value fell against rivals after US job growth slowed last month.
But stock indexes chugged again to record heights, led by technology companies and dividend payers.
Yields fell immediately after the government said that employers added 138,000 jobs last month, which was short of economists' expectations and a slowdown from April's hiring.
The yield on the 10-year Treasury dropped to 2.15% from 2.21% late Thursday and hit its lowest level since mid-November.
The government's jobs report also said that hiring was weaker in March and April than earlier reported. The unemployment rate fell to 4.3% last month, its lowest level since 2001.
Stocks opened for trading an hour after the release of the jobs report, and they were higher for nearly the entire day.
The Standard & Poor's 500 index rose 9.01 points, or 0.4%, to 2,439.07. The Dow Jones industrial average gained 62.11, or 0.3%, to 21,206.29, and the Nasdaq composite added 58.97, or 0.9%, to 6,305.80. All three indexes added to records set on Thursday.
Many economists say they do not expect the latest jobs report to dissuade the Federal Reserve from raising interest rates again at its next policy meeting in two weeks.
The job market and inflation remain strong enough, they say. The central bank has been trying to pull rates gradually off their record low following the Great Recession, and it has raised rates twice since December.
Friday's jobs report slots in with a series of mixed economic reports that show continued modest gains, but no big acceleration. The economy grew at an annual rate of 1.2% in the first three months of the year, for example. That is a relatively weak showing but better than first estimated.
"Is the glass half-full or half-empty on the economic statistics?" asked Rich Weiss, senior portfolio manager at American Century Investments. "I don't know, but it's only half."
Weiss said he has been cautious on US stocks given the continued tepid pace of growth, particularly as indexes have climbed to record after record this year.
"If you were a Martian and looked at the economic stats, you would not be pouring money into the equity market, or at least the US equity market," he said.
Friday's drop in interest rates helped boost stocks in industries that pay big dividends. Real-estate investment trusts rose twice as fast as the overall S&P 500, for example. Dividends look more attractive to income investors when bonds are paying less in interest.
Technology stocks had the day's biggest gains, with those in the S&P 500 jumping 1%. It is the latest move higher for the streaking sector, which is already up 21.3% for the year. That is by far the biggest gain among the 11 sectors that make up the S&P 500.
Chipmaker Broadcom jumped to the biggest gain in the S&P 500 after reporting stronger quarterly revenue and profit than analysts had forecast. It rose 19.94 dollars, or 8.5%, to 254.53 dollars.
Lululemon gained 5.62 dollars, or 11.5%, to 54.29 dollars after the athletic apparel company reported better results for the latest quarter than analysts expected.
On the opposite end were energy stocks, which deepened their losses for 2017 after the price of oil sank. Benchmark US crude oil fell 70 cents, or 1.4%, to settle at 47.66 dollars per barrel. Brent crude, used to price international oils, sank 68 cents to 49.95 dollars per barrel.
Energy stocks in the S&P 500 lost 1.2% Friday, and they are down 14% for the year when the overall index is up 8.9%.
Gold rose 10.10 dollars to 1,280.20 dollars per ounce, silver added 24 cents to 17.53 dollars per ounce and copper lost one cent to 2.57 dollars per pound.
Natural gas was close to flat at three dollars per 1,000 cubic feet, wholesale gasoline fell two cents to 1.58 dollars per gallon and heating oil dipped two cents to 1.48 dollars per gallon.