October jobs report comes in below forecasts, but ISM strong
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U.S. stocks closed at records on Friday, with major indexes extending their lengthy upward moves on the back of strong results at Apple, which offset a mixed set of economic data, including a lackluster October jobs report.
Where did stocks close?
The Dow Jones Industrial Average rose 22.93 points, or 0.1%, to 23,539.19. The S&P 500 gained 7.99 points, or 0.3%, to 2,587.84. The Nasdaq Composite Index climbed 49.49 points, or 0.7%, to 6,764.44.
All three hit all-time intraday highs during the session and closed at records. Both the Dow and the S&P posted their fourth straight daily rise. The Nasdaq marked its 63rd record close of 2017, breaking the record for all-time-high finishes in a calendar year.
For the week, the Dow added 0.5%, the S&P was up 0.3% and the Nasdaq advanced 0.9%. The week marked the eight straight weekly gain for both the Dow and the S&P, the longest such streak for both since November 2013. The Nasdaq closed out its sixth positive week in a row, matching a streak that ended in early March.
What drove the market?
The October payroll report showed 261,000 jobs added last month. While this was well below the 325,000 that had been expected, there was positive news in the unemployment rate dipping to 4.1% from 4.2%, the September report getting revised from a loss to a gain, and the August payroll tally also getting lifted. The October report suggested that there are still lingering effects from Hurricanes Harvey and Irma, which had muddled September's labor-market results.
The health of the U.S. labor market is one of the key measures for the Fed in considering in determining the path for interest rates. Traders are pricing in a more than 98% probability of a rate increase next month, according to the CME Group data.
What are strategists saying?
"The report was obviously still distorted by the hurricanes, though the net gain in the month was pretty solid. There was a good amount of jobs growth, a notable decline again in the unemployment rate, all of which sends the clear message that the labor market is tight," said Charles Lieberman, chief investment officer of Advisors Capital Management. "Ultimately there wasn't a big enough surprise to change market direction."
The dollar rose against all other major currencies, with the ICE Dollar Index up 0.3% at 95.008.
Which stocks are in focus?
Shares of Apple Inc.(AAPL) climbed 2.6%, closing in on a $900 billion valuation. The gain came after the iPhone maker late Thursday reported earnings that easily beat estimates. The stock is the biggest company in the market, and as such has an outsize weight on all three major indexes.
With the day's gain, Apple rose for its sixth time of the past seven sessions, bringing its year-to-date advance to nearly 50%.
Shares of Valeant Pharmaceuticals International Inc.(VRX.T) jumped 3.9% after the drugmaker late Thursday said the Food and Drug Administration has approved the company's Vyzulta drug.
Pandora Media Inc.(P) slumped 25% after the music-streaming company late Thursday said its loss widened in the third quarter. Friday marked the biggest one-day percentage decline for the stock since October 2015, and the weakness took it to an all-time low.
Starbucks Corp shares rose 2.1% after the coffee chain's sales number out late Thursday missed Wall Street forecasts, though it also agreed to sell its Tazo tea brand to Unilever.
Sotheby's(BID) fell 3.3% after reporting its quarterly results.
What else was in focus?
The Institute for Supply Management's nonmanufacturing index rose more than expected to come in at 60.1%, the strongest reading since August 2005. Separately, factory orders rose 1.4% in September, while the IHS Markit U.S. services index stayed at 55.3 in October. A reading of at least 50 denotes expansion.
Minneapolis Fed President Neel Kashkari said that there may be some slack in the U.S. labor market during a speech on monetary policy and the 2018 outlook at the Women in Housing and Finance luncheon in Washington, D.C. He also said he didn't expect to see major changes at the Fed if Powell is in charge.
What are other markets doing?
Oil prices continued higher, with the U.S. benchmark rising 2%, where it traded at a more-than-two-year high. Metals were mixed, and gold was down 0.6% at $1,270 an ounce.
Asian markets closed mixed, with Japan's exchanges closed for the Culture Day holiday. Stocks in Europe rose, setting the benchmark Stoxx Europe 600 index on track for at 0.5% weekly gain.
Bitcoin is up 3.7% at $7,287.75 and hit a fresh all-time high.