Market Update & Important Indicators
U.S. stocks rose Friday after a strong July jobs report, sending the S&P 500 and the Nasdaq Composite Index to record closing highs. The Nasdaq Composite rose 1.1% to 5221.12, topping its previous record close of 5218.86 set July 20, 2015. The S&P 500 gained 0.9% to 2182.87, also a record. The index's financial sector turned positive for the year. Analysts and traders said the report was firm enough to signal that the U.S. economy was stable but wasn't strong enough to bring back concerns about higher U.S. interest rates. Major U.S. indexes posted weekly gains. As indexes moved higher, some investors who had been skeptical of buying during previous rallies considered long positions. The Dow Jones Industrial Average climbed 1% to 18543.53 in response. Nonfarm payrolls rose by 255,000 in July, the Labor Department said. The unemployment rate was unchanged at 4.9%. Economists had expected employers would add 179,000 jobs in July alongside an unemployment rate of 4.8%. June's jobs report, which also showed higher employment growth than anticipated, helped send U.S. stocks to record highs last month.
European stocks rose Friday, still bolstered by the Bank of England's ramped-up stimulus efforts, with an upbeat U.S. jobs report also providing a boost. The Stoxx Europe 600 ended up 1.1%, the strongest percentage rise since July 12, according to FactSet data. All but the health-care sector ended higher. The financial and basic-material sectors were the best performers. On a weekly basis, the Stoxx Europe 600 finished 0.2% lower, marking its first weekly loss in four weeks.
Asian shares gained moderately Friday following aggressive easing by the Bank of England. However, many investors held fire on trades as they awaited U.S. jobs data, which will offer another clue to the timing of rate increases by the Federal Reserve. South Korea's Kospi ended up 0.9% and Hong Kong's Hang Seng rose 1.4%. The Shanghai Composite was 0.2% lower and the Nikkei Stock Average closed flat, ending the week with a decline of 1.9%. In Hong Kong, shares of U.K.-based financial firms rose sharply in response to the Bank of England stimulus.
Australian shares closed higher Friday, as expectations firmed that global interest rates could remain lower for longer while energy companies got a lift from stronger crude-oil prices. The S&P/ASX 200 index advanced 0.4%, or 21.6 points, to 5497.4 in the wake of the Bank of England cutting its benchmark interest rate to the lowest level in its 322-year history, and a monetary-policy statement from the Reserve Bank of Australia that was interpreted by economists as decidedly dovish. The RBA said Friday it expects inflation to remain below its 2%-3% target band for most of its forecast period. It said core inflation would be between 1.5% and 2.5% at the end of 2018, extending an already benign inflation outlook mapped out in a policy statement in May.
Copper prices closed lower, pulled down by a stronger dollar after U.S. jobs data came in better-than-expected. The London Metal Exchange's three-month copper contract settled 0.85% lower at $4,790/t at the PM kerb close on Friday. Other base metals were mixed. Aluminium was up 1.3% at $1,634/t, zinc was up 0.5% at $2,264/t, nickel was up 1% at $10,676/t, lead was down 0.4% at $1,777/t, and tin was up 1.9% at $18,349/t.
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