Wall Street Heartened by Employment Data
Wall Street ended an erratic week with a big advance Friday after the Labor Department said employers added a net 128,000 jobs in August, signaling that an economic slowdown might not be as severe as some have predicted. The major indexes ended the week with gains.
The report bolstered the view of some on Wall Street that the Federal Reserve might leave rates unchanged when it meets Sept. 20. The Fed didn’t touch rates at its Aug. 8 meeting, interrupting a string of 17 straight increases since 2004. Some investors, who have been concerned that the economy will slow too quickly, regard prospects of further rate increases warily.
The Dow Jones industrial average rose 83 points, or 0.7%, to 11,464.15.
The Standard & Poor’s 500 index gained 7.19 points, or 0.6%, rising to 1,311.01, and the Nasdaq composite index rose 9.41 points, or 0.4%, to 2,193.16.
Bonds were little changed, with the yield on the benchmark 10-year Treasury note closing flat at 4.73%.
Oil prices, which retreated earlier in the week after Tropical Storm Ernesto moved away from oil equipment in the Gulf Coast, again slipped below $70, in part because a United Nations deadline regarding Iran’s nuclear ambitions expired without immediate consequence. Crude oil futures settled at $69.19 a barrel, down $1.07, in New York trading.
The Russell 2,000 index of smaller companies was up 1.03 points, or 0.1%, at 721.56.
Wall Street had been awaiting the nonfarm payroll report in a week of light but uneven trading ahead of the long Labor Day weekend. Investors are keeping tabs on the unemployment rate both as an indicator of how quickly the economy might be slowing and out of concerns over wage inflation.
The added jobs, slightly more than the 125,000 economists had expected, brought down the country’s unemployment rate to 4.7% from a five-month high of 4.8% in July. During the last 12 months, wages grew by a strong 3.9%, the Labor Department said. The last time the figure was higher was in June 2001.
Jerry Webman, chief economist at OppenheimerFunds, said the absence of any major surprises in the unemployment report was good news.
“What the stock market doesn’t need over the next few months is more volatility,” he said. Webman cautioned, though, that the market’s reaction suggested that it was anticipating further uneven trading amid continued concerns about energy prices, a cooling housing market and unemployment.
In other market highlights:
* General Motors rose $1.09 to $30.27 after posting a 3.9% rise in U.S. light vehicle sales last month and trimming its fourth-quarter production forecast by 12%, a move that was expected.
* Lockheed Martin rose after winning a multibillion-dollar NASA contract for construction of a spacecraft capable of sending astronauts to the moon and perhaps to Mars, beating out a team from Northrop Grumman and Boeing.
Lockheed rose $1.08 to $83.68. Northrop added 41 cents to $67.22 and Boeing climbed 53 cents to $75.43.
* Intel moved higher amid reports that it would slash as many as 20,000 jobs next week, gaining 31 cents to $19.88.
