AP
Both the Dow Jones Industrial Average and the S&P 500 climbed to new highs Friday, even after a disappointing April jobs report hinted that the economy may not be rebounding at the speed experts had previously forecast.
Nonfarm payrolls increased by 266,000 in April, the Labor Department reported. Economists had been expecting a gain of one million jobs. The unemployment rate rose to 6.1% from 6% in March. The numbers were noisy, as Wall Street raised questions about seasonal adjustments. On one hand, higher wages and longer workweeks indicated that employers may be struggling to find workers. Yet the labor-force participation rate rose as well.
“We have a very confusing set of data,” wrote Tom Simons, money-market economist with Jefferies. “It is troubling in that April should have been a blockbuster month for the labor market, but it is also difficult to trust since it makes so little sense.”
Thanks to the mixed signals in the data, markets erased much of their immediate moves from after the report, when tech stocks soared and Treasury yields sank sharply, and major benchmarks closed at new highs. The
climbed 229.23 points, or 0.7%, to 34,777.76, a new record. The
added 30.98 points, or 0.7%, to 4,232.60, also an all-time high. Meanwhile, the
closed up 0.9%, and the new Barron’s Future Focus Index was up 0.9%.
In bond markets, traders pushed out forecasts for the Federal Reserve’s next interest-rate increase by a few months into 2023, and priced in slightly higher inflation over the next decade. The 10-year Treasury yield rose to 1.58% for the day, after briefly falling below 1.5% for the first time since March following the jobs news.
In Asia, stocks finished mixed with the China CSI 300 dropping 1.3%. The
was flat, as the country considers new Covid-19 pandemic restrictions for Tokyo, with the start of the Olympics just weeks away. The
climbed 0.9% to close at a new high, lifted by well-received earnings from Adidas and
Elsewhere, copper prices advanced on Friday, with the commodity up 3.2% despite the U.S.’s unexpectedly slow jobs growth. China on Friday reported exports and imports grew faster than expected in April, while German exports and industrial output for March were also strong.
A monster commodity rally continues as the global economy heats up, and massive but messy rotation out of the technology/growth/momentum sectors plays into more cyclical/value parts of the market, said
Neil Wilson,
chief market analyst for Markets.com, in a note to clients.
(ticker: GPRO) shares rose 3.4% after the maker of wearable cameras said its year was off to a solid start. First-quarter revenue was lifted by demand for high-end cameras and higher subscription numbers.
Shares of
(ROKU) jumped 11.6%, after the streaming company posted better-than-expected results and an upbeat outlook.
(PTON) shares closed nearly flat, after the home-fitness equipment maker posted forecast-beating sales and executives updated over the impact of recent treadmill recalls.
(BYND) shares slid 7%, after the plant-based protein maker swung to a first-quarter loss and sales also disappointed, as the Covid-19 pandemic continues to weigh on its food-service business.
(BILL) stock rose 18.3% after the company announced it will buy Divvy for $2.5 billion.
(DDOG) stock rose 8.3% after reporting a profit of 6 cents a share, beating forecasts for 3 cents a share, on sales of $198 million, above expectations for $186 million.
(VIAC) stock gained 3.3% despite being downgraded to Outperform and Equal Weight by RBC Capital Markets and Wells Fargo, respectively.
In Europe, shares of German sportswear retailer
climbed 8.4%, after the company lifted its full-year outlook following stronger first-quarter sales.
Write to Alexandra Scaggs at alexandra.scaggs@barrons.com
