Dow, S&P little changed as job growth slows in May

Jon Howard
June 3, 2017

Stocks ended the week at record highs, and once again we're at a loss to explain why.

All 11 sectors in the S&P 500 gained, and the Dow Jones Industrial Average rose to its first record since March 1.

The Nasdaq composite added 58.97, or 0.9 percent, to 6,305.80. Analysts expected about 185,000 jobs to be added in May.

Gold prices rose in the wake of the jobs data (http://www.marketwatch.com/story/gold-lower-headed-for-weekly-drop-on-forecasts-for-strong-jobs-tally-2017-06-02). The three indexes were on track to close at new records after touching intraday highs earlier. Additionally, the benign inflationary environment tugged the yield on the 10-year Treasury note to its lowest level in more than seven months.

The Dow Jones Industrial Average and S&P 500 were little changed after data showed job growth slowed in May, suggesting that a bounce in the labor market was losing steam.

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Dow industrials climbed to all-time highs on Friday, as investors shrugged off a much weaker than expected jobs report.

"The market is beginning to rethink the Fed's course and whether there will still be two interest rate increases by the end of the year, plus a reduction of the balance sheet", said Gregori Volokhine, president of Meeschaert Capital Markets. Technology stocks were also higher with the S&P 500 technology sector gaining 0.25%. Oil futures were crushed again on Friday after President Trump pulled the USA out of the Paris Accord, opening the door for increased oil and coal production.

A separate report showed that the number of workers filing for unemployment claims rose last week, which could be an indication that layoffs are on the rise. Its shares fell $1.29, or 6.9 percent, to $17.52. The euro fell to $1.1214 from $1.1246, and the British pound dipped to $1.2876 from $1.2892. Brent crude, used to price worldwide oils, slipped 14 cents to $50.62 per barrel.

Shares of banks such as Bank of America (BAC.N), JPMorgan (JPM.N), Citigroup (C.N) and Goldman Sachs (GS.N) fell between 0.6 percent and 1.3 percent.

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