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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 54.87 points, or 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. The employment figures are closely watched by Federal Reserve officials as they contemplate the course for monetary policy.
“Today, the good news is actually good news” without the heightened possibility of a rate increase from the Fed, said Jeff Carbone, managing partner at Cornerstone Financial Partners, adding that uncertainty in Europe will likely have a bigger impact on whether the central bank raises rates this year than Friday’s jobs report.
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, said David Lutz, head of ETF trading at JonesTrading. “A lot more of the guys who have been sitting on the sidelines are poking their heads out,” said Mr. Lutz.
The Dow Jones Industrial Average climbed 191.48 points, or 1%, to 18543.53.
Gold futures fell, while the U.S. dollar climbed against other major currencies. U.S. government bonds pulled back.
The yield on the 10-year Treasury note was 1.583%, compared with 1.503% Thursday. Yields rise when bond prices fall.
Nonfarm payrolls rose by a seasonally adjusted 255,000 in July, the Labor Department said Friday. The unemployment rate, calculated from a separate survey of American households, was unchanged at 4.9%.
Economists surveyed by The Wall Street Journal had expected employers would add 179,000 jobs in July alongside an unemployment rate of 4.8%.
ENLARGE
Nonfarm payrolls rose by a seasonally adjusted 255,000 last month, the Labor Department said Friday. Above, a “Now Hiring" sign is posted on a Verizon store in Manhattan in May.
Photo:
Reuters
More on the Jobs Report
- Robust Jobs Report Eases Worries Over Growth
- Fed Stays on Track for Rate Rise
- Recap: Analysis of July Jobs Report
- By the Numbers: July Jobs Report
- Economists React: ‘A Gold Medal’
June’s jobs report, which also showed higher employment growth than anticipated, helped send U.S. stocks to record highs last month.
“Now, you have a good economy and a dovish Fed on hold,” said Zhiwei Ren, portfolio manager at Penn Mutual Asset Management. “This is the best combination” for stock-market growth, Mr. Ren said.
Fed-funds futures, which are used to place bets on central-bank policy, showed Friday that investors and traders see an 18% likelihood of a rate increase at the Fed’s September meeting, compared with 12% before the jobs report, according to CME Group.
The WSJ Dollar Index, which measures the U.S. currency against a basket of 16 others, rose 0.3%, after being down 0.3% ahead of the report.
DJIA Leaders and Laggards - 1 Day
Following a spate of mixed data releases, the health of the U.S. economy right now is crucial for investors, said Paul Markham, global equities manager at Newton Investment Management, which manages £52 billion (around $68.5 billion) in assets.
There hasn’t been a strong economic recovery in the eurozone, the Abenomics experiment in Japan is looking precarious, the U.K. is facing its own challenges, and emerging markets haven’t seen tremendous fundamental economic improvements, he said.
Shares of Bristol-Myers Squibb dropped 16% as the company said trials for Opdivo, a lung cancer drug, didn’t meet expectations. Meanwhile, shares of Merck
& Co., which is producing a rival drug, rose 10%.
The Stoxx Europe 600 rose 1% Friday and was down 0.1% for the week.
Trading in Asia was mixed. Shares in Hong Kong advanced 1.4% as U.K.-based financial firms rose in the aftermath of the Bank of England’s stimulus announcement on Thursday.
Shares in Australia added 0.4% Friday but were down 1.2% for the week, while the Shanghai Composite shed 0.2% for the day, leaving the index down 0.1% for the week. Japan’s Nikkei Stock Average was flat, but ended the week down 1.9%.
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Corrections & Amplifications:
Following a spate of mixed data releases, the health of the U.S. economy right now is crucial for investors, said Paul Markham, global equities manager at Newton Investment Management. An earlier version of this article incorrectlyattributed the comments to Paul Brain, head of fixed income at Newton Investment Management. (August 5, 2016)
Write to Riva Gold at riva.gold@wsj.com
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