Solid corporate earnings and a slightly stronger-than-expected April jobs report lifted the S&P 500 toward its third consecutive week of gains.
The latest batch of better-than-expected first-quarter results reassured investors that company profits are picking up and, on Friday, data released by the Labor Department bolstered the case that the broader economy is strengthening after some weak signals earlier this year.
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The Dow Jones Industrial Average slipped 6.2 points, or less than 0.1%, to 20944 on Friday, while the S&P 500 and Nasdaq Composite added 0.1%. In recent trading, all three indexes were on track to end the week higher.
The pickup in the pace of hiring follows a disappointing March jobs report and comes after the U.S. economy stumbled during the first three months of the year, the Commerce Department said. Still, many investors and the Federal Reserve brushed off concerns about the U.S. economy's soft first-quarter patch. This week, the Fed suggested it is committed to tightening monetary policy.
"It calms the folks that thought we were headed toward a labor market slowdown," said Sameer Samana, global quantitative and technical strategist at Wells Fargo Investment Institute.
Nonfarm payrolls rose by a seasonally adjusted 211,000 in April from the prior month. Economists surveyed by The Wall Street Journal had expected 188,000 new jobs in April.
The yield on the 10-year Treasury note slipped slightly to 2.349% after the release of the report from 2.354% on Thursday, according to Tradeweb.
"That bodes well for the continued outperformance of value stocks," said Jason Bloom, global market strategist at PowerShares by Invesco, referring to the jobs report. "Healthy economic growth and a healthy labor market usually translate into an advantage toward value over growth."
Also benefiting stocks: positive corporate earnings. With more than 400 companies in the S&P 500 reporting, earnings are on track to rise 13% from the year prior, according to FactSet, above the 9.1% rise analysts expected on March 31.
Technology companies have posted some of the strongest earnings growth, with the S&P 500 sector on track to grow 17% from a year ago, according to FactSet. The sector remains the best performer in the broader index year-to-date, up 16% in 2017.
"In an economy with 2% or 2.5% growth, these companies are growing at double digits. They're going to be the engines of growth for the economy, " said Ketu Desai, principal at i-squared Wealth Management.
Technology share gains helped offset a steep drop in the energy sector.
U.S. crude prices are still down more than 7% from a week ago, hitting their lowest level since November, when the Organization of the Petroleum Exporting Countries agreed to cut output for six months. This caps a bad week for commodities and damped investors' hunger to take on risk.
"There are a lot of concerns out there on [oil] oversupply," said Andrew Sullivan, managing director of sales trading at Haitong International Securities, noting the risk that lower oil and energy consumption could indicate slack demand, threatening the global economic recovery.
On Friday, the price of crude stabilized during the trading day after sharp overnight declines. U.S.-traded crude oil was recently up 1.4% to $46.14 a barrel.
In Europe, the Stoxx Europe 600 rose 0.7%, putting its weekly gains at 1.9%.
Hong Kong's Hang Seng and the Shanghai Composite Index both closed down 0.8%. Australia's S&P/ASX 200 lost 0.7%. Markets in Japan and South Korea were closed for holidays.
Aaron Kuriloff contributed to this article.
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(END) Dow Jones Newswires
May 05, 2017 14:08 ET (18:08 GMT)