The Business Times

Why stocks didn't rally more dramatically last Friday

Published Sun, Jul 6, 2014 · 10:00 PM
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LAST week, major US stock indexes finished at record highs after a surprisingly robust jobs report, but the Federal Reserve and earnings season will decide whether or not those gains stick.

About 288,000 workers were added to US payrolls in June during one of the best months for the jobs market of the economic recovery so far and a gain that far exceeded the roughly 250,000 anticipated by economists. The unemployment rate dropped to 6.1 per cent from 6.3 per cent, to stand at its lowest level since September 2008, when the financial and economic crisis began in earnest.

The Dow Jones Industrial Average rose 92 points to close at 17,086, breaking through the 17,000 milestone less than a year after it closed above 16,000 for the first time. Observers might be forgiven for wondering why the Dow didn't rally further, however, given the long wait for a jobs report like last Friday's. The report showed improvement in many of the areas thought to be holding back the recovery: the number of workers forced to stay in part-time jobs, the steady stream of workers who had given up looking for jobs, and the growth of both the private and public sectors.

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