U.S. Stocks Set to End the Week Higher

U.S. stocks up after jobs report

-- Government bond yields and the U.S. dollar rise

-- Euro close to 2 1/2-year high

The Dow Jones Industrial Average headed toward a weekly gain Friday after the monthly jobs report showed employers continued hiring at a healthy rate in July.

The day's moves put the blue-chip index on track to post its second consecutive week of gains and its eighth straight record close.

U.S. stocks have risen to fresh highs in the second half of the year, bolstered by corporate earnings that have shown broad strength across industries and a brighter global economic outlook.

Gains in multinationals that have reported growing earnings, including Apple and Boeing, helped lift the Dow industrials over 22000 for the first time Wednesday. With U.S. economic growth looking slow but steady, strength in earnings will be key to stocks continuing their ascent, investors and analysts say.

The Dow Jones Industrial Average was recently up 39 points, or 0.2%, at 22064. The S&P 500 rose 0.2%, up slightly for the week, and the Nasdaq Composite added 0.2%, but was headed toward a weekly loss.

Hiring in July Was Better Than Expected

Friday's monthly jobs report was the latest news to show the labor market continuing to be a bright spot in the U.S. economic recovery.

Nonfarm payrolls rose by a seasonally adjusted 209,000 in July, the Labor Department said Friday, more than the 180,000 that economists surveyed by The Wall Street Journal had expected. Another highlight from the morning's jobs report: labor-force participation rose while the unemployment rate declined, remaining near a 16-year low.

"Usually there are questions around whether unemployment is just a function of stagnant labor-force participation, but both of these things happening at the same time -- that's a fairly encouraging sign," said Victor Jones, director of trading at TD Ameritrade.

Continued signs of strength in the labor market, matched by earnings growth, should bode well for stock gains heading into the end of the year, Mr. Jones said. Solid economic data should also keep the Federal Reserve on track to raise rates once more by the end of the year, analysts say.

Dollar, Treasury Yields Rise

The U.S. dollar and government bond yields, both of which have been sensitive to expectations of the Fed's interest-rate path, rose following the report.

Higher rates tend to make the dollar more attractive to yield-seeking investors while reducing the appeal of long-dated government debt.

The WSJ Dollar Index, which tracks the dollar against a basket of 16 currencies, jumped 0.6%, on track for its biggest one-day gain since January.

Government-bond prices fell, with the yield on the 10-year U.S. Treasury note climbing to 2.266%, according to Tradeweb, from 2.230% Thursday. Yields rise as bond prices fall.

European Stocks Gain, Japan Slips

Elsewhere, the Stoxx Europe 600 rose 0.7%, on course to end the week higher.

Japan's Nikkei Stock Average closed down 0.4%, with energy and utility firms dragging down the index. It was the index's third straight week of declines.

Australia's S&P/ASX 200 finished down 0.3%, but eked out a weekly gain, after the Reserve Bank of Australia trimmed the country's economic-growth forecasts for the next year.

Write to Akane Otani at akane.otani@wsj.com

(END) Dow Jones Newswires

August 04, 2017 12:25 ET (16:25 GMT)