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U.S. stock-market indexes hit intraday records in early Friday trade, though gains were limited after a weaker-than-expected May jobs report that undermined confidence in the economy.
The S&P 500 index SPX, -0.04% hit an intraday record at 2,433.33, and was recently trading 2 points, or 0.1% higher at 2,432. Of the 11 main sectors, nine were trading higher. Energy shares were leading the losses, down 0.8%, largely following lower oil prices. Financials stocks were the other area of weakness on Wall Street, with the sector trading 0.6% lower.
The Nasdaq Composite Index COMP, +0.17% climbed 22 points, or 0.4%, to 6,269.
All three main indexes were set to end the week with modest gains, of less than 1%.
The May nonfarm payrolls data showed the economy added 138,000 jobs last month, coming in below Wall Street economists’ forecasts.
The details of the jobs report were also weaker than expected. The number of job gains for April and March were revised lower. The unemployment rate slipped to 4.3% but the decline was largely due to shrinking labor force. Average wages rose 0.2% to $26.22 an hour, in line with expectations.
“This is undoubtedly a weak jobs report, especially with downward revisions. But it’s just one data point that will not change the Fed’s course, which is to raise rates at its June meeting,” said Michael Antonelli, equity sales trader at Robert W. Baird & Co.
“Nonfarm payrolls month-to-month is a very jumpy number and a one-off weakness should not be seen as a beginning of a trend. For example, we’ve had a very poor print in May 2016, with 43,000 jobs. Since then, the S&P 500 is up about 400 points,” Antonelli said.
Despite the unexpectedly low print on the jobs report, expectations for a rate hike in June did not fall. Fed fund futures are pricing in a 93.% probability of a rate hike this month, according to the CME FedWatch tool.
The yield on the 10-year Treasury note fell 4 basis points to 2.17% after the jobs report, declining below its 200-day moving average for the first time since October. Meanwhile, the dollar weakened against other major currencies, with the ICE U.S. Dollar index down 0.4% at 96.851.
Other markets: Oil prices CLN7, -1.72% fell to three-week lows on Friday, partly driven by concerns that President Donald Trump’s decision to withdraw the U.S. from the Paris Climate Accord will lead to an increase in U.S. oil output.
Wall Street’s optimism spread across the globe Friday. The Nikkei 225 index closed above the key 20,000 level, adding 1.6% as the Japanese yen eased against the dollar USDJPY, -0.78% European stocks SXXP, +0.18% were headed for a two-week high, and the FTSE 100 UKX, +0.15% was on track for a record.
Individual stocks: Shares of Broadcom Limited AVGO, +5.53% jumped by 6% after reporting earnings.
Shares of Lululemon Athletica Inc. LULU, +12.62% shot up 15% in premarket action after the apparel-maker posted first-quarter results that beat expectations and announced a shake-up of its Ivivva brand, late Thursday.
Shares of Delta Air Lines DAL, +2.31% advances by 1.5% after the company reported its monthly operating performance.
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