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Wall Street lunged higher and closed at new record highs on Friday after a mixed jobs report and an unexpected decline in a leading indicator of the services sector failed to put a dent in investors’ confidence in the US economy or stock market rally. Technology shares led advancers while energy and defensive sectors were the only laggards.
The blistering bull run, now in its 6th week over the past two months drove the Dow Jones Industrial Average up another 2.3%, the S&P 500 up by 2.6%, and the tech-heavy Nasdaq Composite index with a crushing 3.4% gain.
The meteoric rise in the stock market set a string of other records this week including the best start to the year for the Nasdaq in 14 years and highest risk exposure in 18 years. At the same time, the CBOE volatility index, or VIX, closed at its lowest level on record indicating low risk expectations among investors.
A rundown of Friday’s data included a 148,000 increase in December non-farm payrolls, missing +191,000 estimates. The jobless rate was unchanged at 4.1% while average hourly earnings increased 0.3%.
Market participants were also unmoved by a decline in the Institute for Supply Management services sector index. Led by a 4.4% fall in new orders, the ISM December index was down to a four-month low of 55.9 from November’s 57.4, missing expectations for a slight gain to 57.6. Analysts blamed the weakness to seasonal influences as well as rising prices for raw materials due to California wildfires (lumber) and tariffs on Vietnamese steel.
Eclipsed by the labor market report was an increase in the US’s trade deficit to a six-year high of $50.5 billion, and better-than-expected increase of 1.3% in November factory orders.
Related markets reflected investors’ appetite for risk with gold closing with a small loss, Treasury yields higher across the yield curve, and the dollar higher against the Japanese yen.
Here’s where the markets stood at the close:
Dow Jones Industrial Index was up 220.74 points (+0.88%)
S&P 500 was up 19.16 points (+0.70%)
Nasdaq Composite Index was up 58.64 points (+0.83%)
FTSE 100 was up 0.37%
Nikkei 225 was up 0.89%
Hang Seng Index was up 0.25%
Shanghai China Composite Index was up 0.20%
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(+) CNIT (+27.72%) Extending gains tied to ad terminal sales
(+) ZFGN (+8.19%) Completes enrollment for clinical trial of type 2 diabetes drug
(-) OHRP (-81.33%) Failed to meet main efficacy objective in MAKO trial
(-) RGNX (-20.88%) Cash burn is expected to be as high as 48.4% in 2018 as a result of “robust” pipeline of candidate
(-) FRAN (-20.67%) Lowers Q4 outlook to below market expectations
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