Surprisingly Good Jobs Report Drives Early Gains for Stocks
NEW YORK (AP) — A government report revealing surprisingly solid job growth in October put investors in a buying mood Friday and drove broad gains for U.S. stocks in early trading.
The Labor Department said U.S. employers added 128,000 jobs, far more than the 89,500 additions that economists expected. Job growth and consumer confidence have been among the key drivers of the U.S. economy as other areas, particularly manufacturing, face slower growth.
The gains on Friday mark a rebound from a slump on Thursday and put the S&P 500 on a path to reach its third record high this week and its fourth straight week of gains.
Banks and health care companies led the market higher. Citigroup rose 1.5% and Bristol-Myers Squibb gained 1.4%.
Rising oil prices and solid earnings from Exxon Mobil helped push energy stocks higher.
Utilities and real estate companies lagged the market as investors regained an appetite for risk and shifted money away from safe-play holdings. The yield on the 10-year Treasury rose slightly to 1.70% from 1.69% late Thursday.
KEEPING SCORE: The S&P 500 index rose 0.8% as of 10:15 a.m. Eastern time. The Dow Jones Industrial Average rose 230 points, or 0.9%, to 27,276. The Nasdaq rose 0.9%. The Russell 2000 index of smaller company stocks rose 1.2%.
WEEKLY WIN: Solid earnings and economic reports injected confidence into the market throughout the week. The strong week included record highs on Monday and Wednesday, and now potentially Friday.
EYES ON EARNINGS: Corporate earnings were a big focus on Wall Street this week. The majority of companies in the S&P 500 have now reported their latest results, which helped temper fears over a potentially steep contraction for profits. Three-quarters of the companies beat analyst’s forecasts, though the bar had been considered low.
The results also helped lighten some of the worst forecasts for the quarter. Companies in the index are now expected to report a profit slump of less than 3% compared with prior forecasts for a contraction of more than 4%. That figure is likely to continue improving as companies continue reporting earnings, if previous quarters this year are a guide.
STRONG JUMP: Fitbit surged 16% after the maker of wearable fitness technology agreed to be acquired for $2.1 billion by Google’s parent company, Alphabet. Fitbit is a pioneer in the industry, but it’s been under pressure from other device makers.
EXXON: Exxon Mobil rose 1.5% after it beat Wall Street’s third-quarter profit forecasts despite facing a sustained slide in oil prices. The company reported a 3% increase in oil production along with a 4% rise in liquids production driven by growth from its Permian Basin operations.
OVERSEAS: Asian markets mostly rose, though Japan’s Nikkei 225 fell after a weak report on manufacturing. European markets also rose.
By AP reporter Damian J. Troise