Markets advance with good news on jobs
NEW YORK – Wall Street ended an erratic week with a big advance Friday after the Labor Department said employers added 128,000 jobs in August, signaling that an economic slowdown might not be as severe as some have predicted. The major indexes ended the week with gains.
The report bolstered the view of some on Wall Street that the Federal Reserve might leave rates unchanged when it meets Sept. 20. The Fed didn’t touch rates at its Aug. 8 meeting, interrupting a string of 17 straight increases since 2004. Some investors, who have been concerned that the economy will slow too quickly, regard prospects of further rate increases warily.
The added jobs, slightly more than the 125,000 economists expected, brought down the country’s unemployment rate to 4.7 percent from a five-month high of 4.8 percent in July. During the past 12 months, wages grew by a strong 3.9 percent, the Labor Department said. The last time the figure was higher was in June 2001.
The Dow Jones industrial average rose 83.00, or 0.73 percent, to 11,464.15.
Broader stock indicators also posted gains. The Standard & Poor’s 500 index gained 7.19, or 0.55 percent, rising to 1,311.01, and the Nasdaq composite index rose 9.41, or 0.43 percent, to 2,193.16.
Bonds were little changed, with the yield on the benchmark 10-year Treasury note closing flat at 4.73 percent from late Thursday. The dollar was mixed against other major currencies, while gold prices fell.
Oil prices, which retreated earlier in the week after Tropical Storm Ernesto moved away from oil equipment in the Gulf coast, again slipped below $70 a barrel, in part as a U.N. deadline regarding Iran’s nuclear ambitions expired without immediate consequence. Crude oil settled at $69.19 a barrel, down $1.07, on the New York Mercantile Exchange.
The Russell 2000 index of smaller companies was up 1.03, or 0.14 percent, at 721.56.
Wall Street had been awaiting the nonfarm payroll report in a week of light but uneven trading ahead of the long Labor Day weekend. Investors are keeping tabs on the unemployment rate both as an indicator of how quickly the economy might be slowing and out of concerns over wage inflation.
Jerry Webman, chief economist at OppenheimerFunds, contends the absence of any major surprises in the unemployment report is good news. “What the stock market doesn’t need over the next few months is more volatility.”
The major indexes, which fluctuated intraday throughout the week as investors tussled with economic concerns, managed to end the week with respectable gains. The Dow rose 1.60 percent, while the S&P 500 added 1.23 percent and the Nasdaq gained 2.47 percent.
Overseas, Japan’s Nikkei stock closed down 0.04 percent. At the close, Britain’s FTSE 100 rose 0.73 percent, Germany’s DAX index was up 0.39 percent, and France’s CAC-40 gained 0.36 percent.