Stock indices move toward records after strong jobs report

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The S&P 500, Dow Jones Industrial Average and Nasdaq Composite extended gains on Friday afternoon, as a string of gains across the stock market pushed benchmarks toward new highs.

After the monthly employment report confirmed that the US economy continues to recover with a healthy clip, the benchmark S&P 500 index added 0.6%, rising for the seventh consecutive session. The tech-heavy Nasdaq Composite also advanced 0.6%, and the Dow Jones Industrial Average rose 0.4%, with Friday’s rally widening. The S&P and Nasdaq were both on track to close at all-time highs, while the Dow broke out past its all-time high on May 7.

Friday’s actions put stocks in line to end another strong week of gains, continuing a rally that has largely lifted volatile growth stocks and technology stocks. The Nasdaq is up 1.8% over the past five trading days, on course to post its sixth weekly advance out of the past seven. The S&P 500 added 1.7% over that period, while the Dow Jones rose 1%.

Friday’s jobs report added to the good news that markets have released in recent weeks. Employers added 850,000 jobs last month, beating expectations and showing a rebound in labor market activity after it appeared somewhat subdued in previous months. For investors, the gains were further evidence that the economic recovery remains healthy and does not currently guarantee a tightening of fiscal stimulus, which so far meets the expectations of Federal Reserve Chairman Jerome Powell.

“From a market perspective, this was an overall positive jobs report,” said Sima Shah, chief strategist at Principal Global Investors. “While the stronger-than-expected payroll figure indicates a continued strong recovery, the higher unemployment rate indicates some slack in the market, and therefore, we hope some relief for the Fed hawks.”

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