Jobs report takes Dow, S&P to fresh record highs

NEW YORK Fri Jun 6, 2014 4:46pm EDT

Traders work on the floor of the New York Stock Exchange June 3, 2014. REUTERS/Brendan McDermid

Traders work on the floor of the New York Stock Exchange June 3, 2014.

Credit: Reuters/Brendan McDermid

NEW YORK (Reuters) - U.S. stocks rose on Friday, with the Dow and the S&P 500 closing at records, after the May payrolls report provided the latest confirmation of improving economic conditions.

The CBOE Volatility index, Wall Street's so-called fear gauge, ended down 8.1 percent at 10.73, its lowest level since February 2007.

The VIX, which tends to rise when volatility increases or the market drops, has been on the decline for months and is well below its historical average of 20, which some see as a sign that investors are ignoring concerns that could derail the rally.

The day's gains were broad and led by cyclical sectors, which outperform in times of economic expansion. Industrial shares jumped 1 percent while energy shares rose 0.8 percent. The only S&P 500 sector that fell was healthcare, a defensive group, down 0.1 percent.

About 217,000 jobs were added in May, slightly fewer than expected, while the unemployment rate held steady at 6.3 percent. This was the first time job growth has topped 200,000 for four consecutive months since January 2000.

While the report did not point to spectacular growth, "the main thing is that the world's biggest economy is moving in the right direction and slowly gathering momentum," said Marcus Bullus, trading director of MB Capital.

The Dow Jones industrial average rose 88.17 points or 0.52 percent, to 16,924.28, the S&P 500 gained 8.98 points or 0.46 percent, to 1,949.44 and the Nasdaq Composite added 25.17 points or 0.59 percent, to 4,321.40.

With the day's gains, the S&P 500 marked its sixth record close in the past seven sessions.

For the week, the Dow rose 1.2 percent, the S&P 500 rose 1.3 percent and the Nasdaq rose 1.9 percent.

Mining equipment maker Joy Global Inc jumped 3.9 percent to $64.11, building on its 6.7 percent rally on Thursday on the back on strong results, for its biggest weekly gain since August 2012.

Peabody Energy Corp was the biggest percentage decliner on the S&P 500, dropping 1.4 percent at $16.34 after Goldman Sachs downgraded the stock to "neutral."

Hertz Global Holdings Inc tumbled 9.1 percent to $27.73. The car rental company said it would restate financial results for the past three years to correct accounting errors.

Novavax Inc was the Nasdaq's most active stock, down 7.9 percent to $4.17 in heavy volume a day after a public offering of 25 million common shares was priced at a discount to its Thursday close.

Trading volume was around 5.27 billion shares on U.S. exchanges, below last month's average of 5.75 billion, according to data from BATS Global Markets.

(Editing by Bernadette Baum)

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Comments (8)
Louieloueye wrote:
You are not going to create jobs, wealth or prosperity when you have such a massive level of income inequality like you are seeing today in America. These are the FACTS:

80% of all of the growth in income and wealth has gone to the top 1% over the last thirty years.

The top 1% has more wealth and income than the bottom 95% of America combined.

We have the wealth inequality levels roughly equivalent of that of third world countries like Uganda and Pakistan.

So basically we have the economic conditions of a third world country. The American economy is totally incapable of creating jobs outside of the areas of Domestic Non-Tradable services like fast food and other menial jobs.

In the 21st century the opportunity society has disappeared. Middle class jobs are scarce. To stay even with population growth from 2002 through 2011, the economy needed about 14 million new jobs. However, at the end of 2011 there were only 1 million more jobs than in 2002.

Manufacturing jobs? they not only did not grow with the population, but declined absolutely. During these nine years, 3.5 million middle-class manufacturing jobs were lost.

The lack of jobs, especially high value-added, high productivity jobs, is the reason real median household income has declined and the distribution of income has worsened. Without rising real household income, there cannot be a consumer economy.

The cause of all of the problems is the off-shoring of Americans’ jobs. When jobs are moved offshore, consumers’ careers and incomes, and the GDP and payroll and income tax base associated with those jobs, go with them. When the goods and services produced for American markets by off-shored labor are brought into the US to be sold, the trade deficit rises, and downward pressure is put on the dollar, pushing up domestic inflation.

Jobs offshoring is driven by Wall Street, “shareholder advocates,” the threat of takeovers, and by large retailers, such as Walmart. By cutting labor costs, profits go up. It is that simple. However, as a result of sending American jobs to cheap labor countries, US consumer incomes go down. The end result is to destroy the domestic consumer market. What would have been US consumer income growth becomes instead profit growth for US corporations.

Jun 06, 2014 10:51am EDT  --  Report as abuse
tmc wrote:
Of course Wall Street is up. It’s the only place left to put money. All American 401ks, mutual funds, IRAs etc.. are all funneled into the markets. Nothing like buying high ayy?
As long as the Banksters leave no other avenues for investment, then it will continue to climb over all. As some people think, this is a set up for another crash so the top 1% can buy it all back up cheap and do it again. I’m betting tactically after the 2016 elections. But it might happen in 2015 if they loose control.

Jun 06, 2014 11:16am EDT  --  Report as abuse
comitas7 wrote:
“The market’s momentum will eventually wane, but fundamentals look OK to fairly strong, and I’ll take strong economic data like this any day,” said Andres Garcia-Amaya, Global Market Strategist at J.P. Morgan Funds in New York, which has $400 billion in assets under management.”

Fundamentals look “fairly strong”. Interesting, because the continuance of printing tens of billions of dollars of worthless US Securities per month would suggest otherwise. However, this is what passes for the new economic orthodoxy.

Jun 06, 2014 11:25am EDT  --  Report as abuse
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