Stocks Ride Jobs Report Wave as S&P 500, Nasdaq Rise to Record High

The main US stock markets posted firm gains on Friday, with the Standard & Poor’s 500 and the Nasdaq Composite closing at record highs after data showed the domestic economy added more jobs in July than economists predicted.

After a week where fluctuating oil prices and earnings set the agenda, the Labor Department’s figures put the focus back on the economy by showing 255,000 jobs were added last month, after an upwardly revised 292,000 gain in June. Expectations were for a gain of 185,000.

All but two of the S&P’s 10 sectors were higher by the end of the day, with financials posting the largest gain of 1.8% amid speculation that the Federal Reserve may now have room to raise interest rates after the jobs data. Goldman Sachs (GS) rose 2.6%, JPMorgan Chase (JPM) increased 2.7% and Bank of America (BAC) jumped 3.9%.

Energy managed a 0.8% increase even as US crude prices nudged 0.1% lower to $41.87 a barrel. With investors in a buying mood to close the week, they moved away from the defensive utilities sector, which was the worst performing group with a 1.4% slide. Verizon (VZ) slipped 0.5% and American Water Works (AWK) lost 2.1%.

The Dow Jones Industrial Average gained almost 200 points, with 27 of the 30 blue-chip components rising, led by a strong 10% gain in pharmaceutical giant Merck (MRK) after the company said the Food and Drug Administration accepted a new drug application for MK-1293.

Rival Bristol-Meyers Squibb (BMY) dropped 16% after saying cancer treatment study missed its endpoint.

Next week’s calendar has the July Labor Market Conditions Index on Monday at 10 a.m. ET. Next Friday, July retail sales and producer prices will be released, as well as June business inventories and the preliminary August University of Michigan consumer sentiment.

By the close on Friday, the Nasdaq was up 1.1%, the Dow gained 1% and the S&P 500 rose 0.9%.

Globally, the FTSE 100 was up 0.8%, the Hang Seng Index rose 1.4%, the Shanghai Composite slipped 0.2% and the Nikkei 225 was unchanged.

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