U.S. stocks jumped to record levels on Friday even after a disappointing April jobs report as the weak number made investors believe easy monetary policies that powered the market’s historic rebound will stay in place for longer. Some investors also dismissed the report as a one-time blip that doesn’t signal any slowdown in the economic recovery.
The S&P 500 climbed 0.7% to 4,232.60, hitting a record high.
The Dow Jones Industrial Average rose 229.23 points, or 0.7%, to 34,777.76 to reach another closing high.
The tech-heavy Nasdaq Composite popped 0.9% to 13,752.24.
For the week, the Dow rallied 2.7% to break a two-week losing streak. The S&P 500 gained 1.2%, while the Nasdaq Composite shed 1.5% this week.
The Labor Department said nonfarm payrolls increased by just 266,000 in April, far less than the 1 million total economists were expecting, according to Dow Jones. The unemployment rate rose to 6.1% last month amid an escalating shortage of available workers, higher than an expectation of 5.8%. Meanwhile, March’s originally estimated total of 916,000 was revised down to 770,000.
Investors bet that the big jobs miss could keep the easy policies of the Federal Reserve in place, including record low interest rates and a massive bond-buying program.
“The Fed will feel some vindication in their hesitancy to embrace tapering,” Adam Crisafulli, founder of Vital Knowledge, said in a note following the jobs report Friday.
Bank of America research warned as recently as Friday that strong economic data could hit stocks, especially tech shares, if it caused the central bank to dial back on its easy monetary policies.
Reference: CNBC
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