The S&P 500 and Dow Jones Industrial Average closed at record levels on Friday, wrapping a seventh straight week with gains.
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A surprisingly strong jobs report fueled Friday's mostly modest, albeit record-setting, advance. The U.S. economy added 321,000 jobs in November, beating the consensus number by 86,000, while unemployment rates remained steady at 5.8%.
With upward revisions to prior months, the payrolls number was far stronger than the consensus forecast by economists polled by MarketWatch, which called for 235,000 jobs. A string of robust job gains over the past several months is likely to prompt the Federal Reserve to speed up the rate hikes.
Worries among investors that interest rates will rise sooner rather than later, have capped gains on Wall Street, according to Kim Forrest, senior portfolio manager at Fort Pitt Capital.
The S&P 500 (SPX) rose 3.45 points, or 0.2%, to close at 2,075.37, an all-time high. The gain on the benchmark were led by financials and health-care sector stocks, while energy and utilities sector shares lagged behind.
The Dow Jones Industrial Average (DJI) set an intraday high and came within 10 points of 18,000 level, but settled 58.60 points, or 0.3%, higher at 17,958.79. Gains in JPMorgan Chase (NYSE:JPM) and Goldman Sachs (NYSE:GS) were the biggest among blue-chip stock gainers.
The Russell 2000 (RUT) outperformed large-caps again, adding 9.42 points, or 0.8%, to 1,182.42 and added 0.8% over the week. Meanwhile, the tech-heavy Nasdaq Composite (RIXF) added 11.32 points, or 0.2%, to 4,780.76. The index closed lower over the week.
The strong November jobs tally represented the biggest gain since early 2012 and extends the strongest streak of hiring in several decades. Virtually every industry was hiring and many of the new jobs were so-called good jobs with higher paying wages.
In another positive sign, the average hourly wage of American workers rose a strong 0.4% in November to $24.66 after two straight weak readings. Still, wages are only up 2.1% in the past 12 months, a rate that's barely changed since the recovery began in mid-2009.
Factory orders fell a worse-than-expected 0.7% in October, the Commerce Department reported.
Eric Wiegand, senior portfolio manager at U.S. Bank Wealth Management, said the jobs report had very little to complain about.
"For optimist, strong gains in the labor market means the economy is getting stronger. Even if this means the Fed will raise rates sooner, it will be for the right reasons," Wiegand said.
"The current environment of low inflation and easy money is a Goldilocks scenario for stocks," he added.
Wiegand also predicted the Fed's actions still will be measured and transparent. Still, investors will be watching the outcome of the FOMC meeting on Dec. 16-17 closely for any hints on the timing of interest rate increases.
Stocks to watch: Discount retailer Big Lots Inc.(BIG) shares plunged 17% reporting a wider-than-expected quarterly losses.
Delia's Inc. (NASDAQ:DLIA) wiped out 84% of its value after the teen retailer, said it is filing for Chapter 11 bankruptcy.
Tenet Healthcare Corp. (NYSE:THC) jumped 7%. The company will be among the health-care stocks benefiting if a proposal to expand Medicaid in Florida to cover about 1 million uninsured is adopted, analyst Chris Rigg at Susquehanna said in a report.
While the European Central Bank gave no hints at Thursday's meeting about future stimulus, markets were convinced otherwise, with European stocks up 1%. That came even as the Bundesbank cut its German growth forecasts for this year and the next two. The FTSE 100 rose 1%.
Chinese trading volume hit a record, with the Shanghai Composite Index closing up 1.3% in a wild day of trading. The index has gained nearly 10% this week. The Nikkei 225 index rose just 0.2%, but supported the dollar, which stayed above the key Yen120 level.
Oil prices continued to fall, with crude (CLF5) settling at $66 a barrel and Brent under $70 a barrel after Saudi Arabia cut prices for U.S. and Asia oil, and analysts are waiting to see if other OPEC nations will follow. Gold prices(GCG5) fell 1.4%.