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S&P 500, Nasdaq at Record Highs as Job Gains Top Expectations

Stock MarketsJul 02, 2021 03:51PM ET
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© Reuters.

By Yasin Ebrahim

Investing.com – The S&P 500 and Nasdaq rose to fresh record highs Friday, as a stronger jobs report strengthened optimism on the recovery and sent U.S. bond yields lower, paving the way for ride higher in tech stocks.

The S&P 500 rose 0.7% to a record intraday high of 4,352.20. The Dow Jones Industrial Average climbed 0.45%, or 154 points, the Nasdaq was up 0.78% and hit an intraday record high of 14,640.6.

The economy created 850,000 jobs in June, a sharp increase from the 583,000 in April, well ahead of economists’ forecast of 720,000.  It was the largest gain in 10 months.

”Labor shortages are still an issue, but employers seem to be adjusting to the new reality and finding ways to attract workers with higher wages and/or sign-on bonuses,” Jefferies (NYSE:JEF) said in a report.

Average hourly earnings climbed 0.3% in June increase in wages, but that was “distorted by disproportional job gains in leisure & hospitality and retail,” Jefferies added. “After adjusting for industry mix shifts, wages rose by 0.5% month-on-month in June, and are up 4.5% year-on-year.”

The expected increase in the wages will likely boost inflation and may lead to the tightening its monetary policy sooner than expected.

“If this trend does materializes this will be a key factor that will mean inflation stays elevated for even longer. We believe headline inflation will stay above 4% well into 2022 and take the view that it is increasingly probable the Federal Reserve will end up raising interest rates in 2022,” ING said.

U.S. bond prices, which trade inversely to yields, shrugged off the prospect of the sooner rather than later monetary policy, to trade lower. Falling bond yields, the ally of the stocks with higher valuations, helped lift tech stocks. 

Apple (NASDAQ:AAPL) and Microsoft (NASDAQ:MSFT) Alphabet (NASDAQ:GOOGL) Amazon.com (NASDAQ:AMZN) and Facebook (NASDAQ:FB), which together make up about quarter of the S&P 500 weighting were up more than 1%.

Energy, meanwhile, clawed back some of its gains from a day earlier as investors looked ahead to a production decision from OPEC+ following a delay.  

OPEC and non-OPEC ministers kicked off their meeting Friday, which was delayed by one day, after the United Arab Emirates was reported to have made a last-minute objection to a preliminary agreement struck by Saudi Arabia and Russia on Thursday.

In other news,  Lordstown Motors (NASDAQ:RIDE) fell 11% on reports that the The Justice Department is investigating the company. The probe followed an investigation from the Securities and Exchange Commission into the company concerning claims by a short seller that the company misled investors.

S&P 500, Nasdaq at Record Highs as Job Gains Top Expectations
 

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Comments (4)
NUNO LOUREIRO
NUNO LOUREIRO Jul 02, 2021 4:28PM ET
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Low NFP good news for stocks, FED keeps pumping money, high NFP good news for stocks the economy is doing great.. Win, win, always ATH...magic world, were the sun always shines
Jouni Matero
Jouni Jul 02, 2021 4:28PM ET
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I feel total eclipse is about to arrive go this magic world:https://www.theguardian.com/business/2021/jul/02/1970s-stagflation-2008-debt-crisis-global-economy
Ben Ramirez
Ben Ramirez Jul 02, 2021 4:17PM ET
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Last year, we were getting weak jobs report data...and look what happened: Stock prices rose. Lesson learned: FED-induced markets will continue to manipulate stock prices
Larry DeAngelis
Larry DeAngelis Jul 02, 2021 3:13PM ET
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It only is programmed to go up! When the payroll report missed by 750k it rallied on no tightening. Then today the report is strong and it rallied on stronger jobs. Hopefully, this one way manipulated market will at least have a correction soon! What happened to free markets???
Jouni Matero
Jouni Jul 02, 2021 3:13PM ET
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Banks and FED need to rip off money from retail as much as they can before crash comes so they can compensate the losses beforehand and not from their own pockets. By seeing this 6 weeks solid raise without stops despite of bad news here and there, does someone STILL believe market is not Totally manipulated and control Led by trillionaire banks and FED?
JAMES CUNHA
JAMES CUNHA Jul 02, 2021 3:13PM ET
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I thought the same. There are no free markets.  It appears that Wall Street is essentially running the Fed and making the policy decisions.  There is an article from the Wall Street Journal that reported on the Fed hiring Blackrock to "calm" the markets last year.
Jouni Matero
Jouni Jul 02, 2021 3:13PM ET
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I have no doubts that's true. By the way, debt ceiling comes in effect in the of July (if they don't somehow manage to shift it forward) and that's one money hole where they need money. In case you haven't watched documentary film "Inside Job" from 2010 go watch and it'll open your eyes how criminal their business is. They simply steal all the money possible from people without any conscience.
Grant Leonhard
Grant Leonhard Jul 02, 2021 3:13PM ET
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tech never loses. you should always own some
Ben Ramirez
Ben Ramirez Jul 02, 2021 3:13PM ET
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It's manipulated as *****man
Gamer Turtle
GamerTurtle Jul 02, 2021 1:58PM ET
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If it's doing record high on days where there is 20M unemployed, why wouldn't it be at record high as economy gets better. lol. it's just a big online casino, there is no real value in specific analysis on why it's at record high on any given day.
Jouni Matero
Jouni Jul 02, 2021 1:58PM ET
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Pure casino. It's hilarious to read these joke titles writers come up, any excuse is good while they as "wallstreeters" more than well know this record high fantasy trip is one big FED and big banks fraud illution, and just a matter of time when it pops and ordinary people lose their money while billionaires gain even more. Operation completed.
Ben Ramirez
Ben Ramirez Jul 02, 2021 1:58PM ET
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FED is controlling the markets. This is going to backfire badly.
 
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