NEW YORK: News that U.S. employers added workers at a good clip for the fourth consecutive month helped send the stock market higher Friday.
The Standard & Poor’s 500 index notched another record, its eighth in the past 10 days. For the week, the index climbed 1.3 percent, the third straight in which it has posted solid gains.
Before the market opened, the Labor Department said employers added 217,000 jobs to their payrolls in May, in the range of what economists had expected. The unemployment rate stayed put at 6.3 percent. Wall Street forecasters had expected it to inch up.
“It’s another positive sign, along with retail sales, housing and everything else we’ve been seeing,” said JJ Kinahan, chief strategist at TD Ameritrade. “There’s nothing in this report to slow this market down, but all everyone has wanted to talk about is why the market is going to fall.”
The S&P 500 index gained 8.98 points, or 0.5 percent, to close at 1,949.44.
The Dow Jones industrial average rose 88.17 points, also 0.5 percent, to 16,924.28, and the Nasdaq composite climbed 25.17 points, 0.6 percent, to 4,321.40.
Industrial and energy companies, whose success often hinges on economic growth, led seven of the 10 sectors in the S&P 500 index higher.
Investors began to feel more optimistic earlier in the week on signs that the U.S. economy had shaken off a rough winter and on big steps by the European Central Bank to revive the region’s economy.
Other reports revealed a rise in manufacturing growth in the world’s two largest economies, U.S. and China. A survey of the U.S. service industry, which employs roughly nine out of every ten workers, showed an increase in new orders, production and hiring.
Even so, many investors question the stock market’s slow and steady rise. There hasn’t been a “correction,” Wall Street-speak for a drop of 10 percent or more, since August 2011. The market is starting to get expensive compared with the historical average. Investors are currently paying $17 for every $1 in earnings for companies in the S&P 500 index, up from the historical average around $15.
Robert Pavlik, chief market strategist at Banyan Partners, a wealth-management firm, said he wouldn’t be surprised to see the market drop in the summer months, especially if companies turn in dismal second-quarter results.
“The stock market isn’t all that expensive right now,” Pavlik said, “but I just don’t see the earnings growth. That’s why I think second-quarter earnings will be important.”
In the U.S. government bonds market, the yield on the 10-year Treasury was unchanged from Thursday at 2.59 percent. Oil rose 18 cents to $102.66 a barrel.