Stocks Close at Record Highs Despite Jobs Weakness
NEW YORK ( TheStreet) -- Major U.S. stock markets were wobbling back and forth between positive and negative territory throughout Friday's trading session before finally finishing in the green with record closing highs in the Dow Jones Industrial Average and S&P 500.
This, as investors weighed the weaker-than-expected July nonfarm payrolls report and other disappointing data against the potential that this could slow down Federal Reserve stimulus tapering plans.
The S&P 500 rose 0.16% to settle at 1,709.67. The benchmark index closed in the green for the week, up 1.07% after crossing 1,700 for the first time Thursday with the help of some encouraging data and earnings reports from corporate heavyweights. The Dow Jones Industrial Average added on 0.19% to close at 15,658.36, finishing the week up 0.64%. The Nasdaq finished up 0.38% to 3,689.59, wrapping up the week higher by 2.12%.
Following signs of labor market improvement in recent months, investors had been widely betting that September would mark the beginning of the Fed's pullback from its $85 billion-a-month stimulative bond-buying program. But after Friday's softer report, which included downward revisions, investors are now increasingly considering December to be the more likely period from which tapering would begin, though with measured confidence as they consider other economic events to come. After Friday's softer report, Peter Cardillo, chief market economist at Rockwell Global Capital in Manhattan commented that "hiring remains stuck at a consistent pace which we think will keep the Fed buying bonds for the remainder of the year."
Meanwhile during a speech about the economy in Boston during the day, St. Louis Federal Reserve President James Bullard said the Fed should hold off on any tapering until there's more evidence of stronger growth.
The July nonfarm payrolls report showed an addition of a less-than-expected 162,000 jobs last month after a downwardly revised 188,000 in June, according to the Bureau of Labor Statistics. The May figure was also downwardly revised. Meanwhile, the release said that the jobless rate slipped to a lower-than-expected 7.4% from 7.6% but that came amid a decline in the labor participation rate.
Economists, on average, were expecting nonfarm payrolls to rise by 184,000 and the unemployment rate to fall to 7.5%.
Sealed Air Corp.
American International Group