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S&P 500, Dow close at record highs as solid jobs data boosts cyclicals

EconomyAug 06, 2021 08:18PM ET
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© Reuters. FILE PHOTO: A trader works on the trading floor at the New York Stock Exchange (NYSE) in Manhattan, New York City, U.S., August 5, 2021. REUTERS/Andrew Kelly

By Echo Wang

(Reuters) - The Dow and the S&P 500 indexes closed at record highs on Friday following a stronger-than-expected jobs report, while investors shrugged off concerns over the Delta variant impacting a nascent economic recovery.

Nonfarm payrolls increased by 943,000 jobs last month, a Labor Department report showed. Economists polled by Reuters had forecast payrolls would increase by 870,000 jobs.

The Labor Department's closely watched employment report also showed strong wage gains, as employers competed for scarce workers, and a drop in the unemployment rate to a 16-month low.

"I think that investors are now saying we’ve got renewed confidence in the economic recovery,” said Sam Stovall, chief investment strategist at CFRA. “And as a result, (investors) are rotating again into the cyclical, the value stocks, as well as the smaller-cap issues.”

Four of the 11 major S&P 500 sectors rose, with financials posting the biggest daily percentage gain since July 20. The S&P 500 technology sector index fell.

Although the three main indexes gained for the week following a stellar corporate earnings season, sentiment has been hurt by fears of higher inflation resulting in a sudden tapering in monetary policy. For the week ended on Friday, the S&P 500 was up 0.94%, the Dow added 0.78% and the tech-heavy Nasdaq gained 1.11%.

Focus now turns to a meeting of Federal Reserve leaders in Jackson Hole, Wyoming, later this month to discuss policy and decide future stimulus strategy.

The Dow Jones Industrial Average on Friday rose 144.26 points, or 0.41%, to 35,208.51, the S&P 500 gained 7.42 points, or 0.17%, to 4,436.52 and the Nasdaq Composite dropped 59.36 points, or 0.4%, to 14,835.76.

On the earnings front, American International Group Inc (NYSE:AIG) rose 4.7% after it beat second-quarter profit estimates on Thursday.

Zynga (NASDAQ:ZNGA) Inc tumbled 18.2% after issuing a disappointing forecast for bookings and announcing a potential acquisition worth over half a billion dollars.

Corteva (NYSE:CTVA) Inc rose 8.0% after raising its net sales forecast for the year.

Analysts expect second-quarter profit growth of 92.9% for S&P 500 companies, according to IBES data from Refinitiv. Of the 427 companies in the index that have reported earnings so far, 87.6% beat analyst expectations, the highest on record.

In other corporate news, shares of Robinhood Markets Inc (NASDAQ:HOOD) surged 7.9% on Friday after a roller-coaster week in which the online brokerage was among the hottest of so-called meme stocks, adding billions to its value.

Volume on U.S. exchanges was 8.65 billion shares, compared with the 9.63 billion average for the full session over the last 20 trading days.

Advancing issues outnumbered declining ones on the NYSE by a 1.33-to-1 ratio; on Nasdaq, a 1.07-to-1 ratio favored advancers.

The S&P 500 posted 42 new 52-week highs and 1 new low; the Nasdaq Composite recorded 112 new highs and 80 new lows.

S&P 500, Dow close at record highs as solid jobs data boosts cyclicals
 

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Comments (9)
MD Shahin Khan
MD Shahin Khan Aug 07, 2021 3:47AM ET
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Fajju Khan
Fajju Khan Aug 06, 2021 9:13PM ET
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😭😭😭😭😭😭
Jay Jay
Jay Jay Aug 06, 2021 6:01PM ET
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What's with all the hate on US economy, even if it propped up by US gov.
Lawrenti Berija
Lawrenti Berija Aug 06, 2021 12:47PM ET
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schwanzlutscher news about a schwanzlutscher market
John Healy
John Healy Aug 06, 2021 12:47PM ET
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Bravo!
Mitchel Pioneer
Mitchel Pioneer Aug 06, 2021 12:41PM ET
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The legalized financial defiling of America continues.
Franco Dominguez
Franco Dominguez Aug 06, 2021 10:41AM ET
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create waitress, dishwasher, stripers never the best employment rate
Mitchel Pioneer
Mitchel Pioneer Aug 06, 2021 10:20AM ET
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Good news is never "priced in" to the laughingstock of the financial world, as the Friday fraud predictably unfolds in broad daylight.  Average holdings in retirement plans criminally inflated again, as America is sent into yet another weekend with a financial knife in their back.  Only in the US Ponzi Scheme.
Stephen Fa
Stephen Fa Aug 06, 2021 9:41AM ET
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wage inflation for IT software developers in US has gone up over 20% in 2021
Md necar Jomaddar
Md necar Jomaddar Aug 06, 2021 8:59AM ET
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Hlw sir
 
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