Stocks Edge Higher, Dollar Weakens After Jobs Report

By Riva Gold and Corrie Driebusch Features Dow Jones Newswires

Nikkei ends six-week losing streak

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-- European stock funds post biggest outflow since February

U.S. stocks edged higher Friday on signs of strength in the U.S. economy.

The S&P 500 was on track for its biggest weekly gain in more than a month following upbeat data on personal spending and income, as well as steady job creation and low employment in August.

The pace of hiring slowed and the U.S. unemployment rate rose slightly last month, according to the Labor Department, however wages ticked up less than expected. This is good for stock prices, some analysts say, as wages are rising enough to spur more consumer spending but not at a fast enough pace to compel the Federal Reserve to raise interest rates.

"Thankfully, the improvement in the labor market is not leading to too fast wage growth," said Sameer Samana, global quantitative and technical strategist at Wells Fargo Investment Institute. "It's right now in the sweet spot where it's enough to drive consumption, but not enough to lead to inflation jumping up so the Fed feels it needs to be more aggressive. It's also not affecting profit margins yet."

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In August, average hourly earnings ticked up 0.1% from the prior month, according to the Labor Department. Economists surveyed by The Wall Street Journal had expected earnings to rise 0.2%.

The Dow Jones Industrial Average rose 43 points, or 0.2%, to 21991 in recent trading, while the S&P 500 added 0.1%. The indexes were on pace to end the week up 0.8% and 1.3%, respectively, their biggest gains since July. The Nasdaq Composite slipped less than 0.1%, but was set to finish the week up 2.6%, its best weekly performance of the year.

In Europe, the Stoxx Europe 600 rose 0.8%. Shares of industrial goods and construction companies were among the best performers, as data showed activity in the eurozone's manufacturing sector increased in August to a joint 74-month high.

Investors pulled the most from European equity funds since February in the week through Wednesday amid concerns about this month's European Central Bank meeting and a recent climb in the euro to a 2 1/2 -year high, according to fund-tracker EPFR Global.

Earlier, Asian shares mostly inched higher, with China gaining slightly after a private gauge of Chinese factory activity rose for the third straight month in August. The Shanghai Composite Index closed 0.2% at its highest level since December 2015 as coal and steel stocks advanced. Stocks in Shenzhen added 0.6%.

Japan's Nikkei Stock Average added 0.2% amid gains in energy companies. The index ended a six-week losing streak, its longest since early 2014, with its biggest weekly gain since June.

Australia's S&P ASX 200 rose 0.2%, led by health-care shares, while markets in Singapore, Indonesia, Malaysia and the Philippines were closed Friday for a holiday.

In commodities, gasoline futures jumped Friday as Hurricane Harvey caused U.S. refinery and pipeline shutdowns. U.S.-traded crude oil fell 1% to $46.74 a barrel.

Write to Riva Gold at riva.gold@wsj.com and Corrie Driebusch at corrie.driebusch@wsj.com

(END) Dow Jones Newswires

September 01, 2017 10:30 ET (14:30 GMT)