US: S&P 500, Dow end at record highs as weak jobs data eases rate worries

[NEW YORK] The Dow and S&P 500 hit record closing highs on Friday while registering gains for the week, and the Nasdaq recovered after US jobs data eased concerns over prospects for rising rates.

US job growth unexpectedly slowed in April, likely restrained by shortages of workers, the Labor Department report showed.

The report alleviated some concerns about rising inflation and potentially higher US interest rates, which some investors worry would hurt growth companies with high valuations.

"Growth names that were taken to the woodshed are getting another chance, because they will be perceived to be less risky in an environment where there is a slower recovery, and that's really what the jobs data is indicating," said Tom Martin, senior portfolio manager at Globalt Investments.

Heavily-weighted growth stocks such as Microsoft and Apple rose by 1.1 per cent and 0.5 per cent, respectively, giving the S&P 500 and Nasdaq their biggest boosts.

But gains were broad-based, with all major S&P 500 sectors ending in the green and energy and real estate leading the advance. Energy and materials both hit fresh highs.

The Dow rose 229.23 points or 0.66 per cent to 34,777.76, the S&P 500 gained 30.98 points or 0.74 per cent to 4,232.6 and the Nasdaq Composite added 119.40 points or 0.88 per cent to 13,752.24.

For the week, the Dow rose 2.7 per cent, its biggest weekly percentage gain since March. The S&P 500 gained 1.2 per cent, its best week since mid-April, while the Nasdaq shed 1.5 per cent.

"The anticipation and confirmation of (Federal Reserve) policy staying the same and continued economic recovery with vaccines rollout have fuelled these all-time highs, but we do believe the volatility is going to be tightened in the short term," said Greg Bassuk, chief executive at Axs Investments.

A raft of upbeat earnings also helped stocks, and S&P 500 earnings are now estimated to have increased 50.4 per cent in the first quarter from a year ago, which would be the highest growth rate since the first quarter of 2010, according to Refinitiv data.

Payments firm Square rose 4.2 per cent after reporting a better-than-expected quarterly profit, as surging demand for bitcoin fuelled a jump in cryptocurrency transactions on its application.

Streaming device maker Roku jumped 11.5 per cent following an upbeat revenue outlook, while fitness equipment maker Peloton Interactive gained as it laid out steps to improve the safety of its equipment.

Expedia Group shares rose 5.2 per cent as analysts raised price targets following the company's upbeat results.

Advancing issues outnumbered declining ones on the NYSE by a 3.27-to-1 ratio; on Nasdaq, a 2.12-to-1 ratio favoured advancers.

The S&P 500 posted 164 new 52-week highs and one new low; the Nasdaq Composite recorded 164 new highs and 64 new lows.

Volume on US exchanges was 10.23 billion shares, compared with the 10.11 billion average for the full session over the last 20 trading days.

REUTERS