Indexes hit records again, shrugging off jobs report

Stocks rallied Friday to more records on Wall Street as a disappointing report on the nation’s job market signaled to investors that interest rates likely will stay low.

The S&P 500 rose 0.7%, topping the previous all-time high set last month. The Dow Jones Industrial Average set a record high for the thirdstraight day.

Technology companies accounted for a big share of the broad rally, which included solid gains by stocks in the energy, industrial, and consumer discretionary sectors.

The gains helped the S&P 500 notch its eighth weekly gain in the past 10 weeks.

The S&P 500 index rose 30.98 points to 4,232.60, its third-straight gain. The Dow gained 229.23 points, or 0.66%, to 34,777.76. The Nasdaq composite picked up 119.39 points, or 0.9%, to 13,752.24.

Small company stocks also got a solid bump. The Russell 2000 index outgained the major stock indexes, climbing 30.21 points, or 1.4%, to 2,271.63.

Voices up and down Wall Street acknowledged that Friday morning’s jobs report was a big disappointment. It’s usually the market’s most anticipated economic data of each month and it showed employers added just 266,000 jobs in April.

That was far fewer than the 975,000 jobs that economists expected and a steep slowdown from March’s hiring pace of 770,000. The weak report jolted the bond market and initially sent yields tumbling.

“It was a bit of a shock when that headline number hit, but you realize most of, if not all of it, is the result not necessarily of demand, but supply,” said Peter Essele, head of portfolio management for Commonwealth Financial Network. “There seems to be a bit of a labor shortage at the moment.”

The yield on the 10-year Treasury note briefly dropped below 1.49%, toward its lowest level in two months before recovering. By the market’s close it was unchanged from 1.56% late Thursday.

Many analysts said they don’t want to put too much emphasis on just one month of discouraging data. They still expect the economy to strengthen mightily as coronavirus vaccinations roll out. The weak jobs number also bolsters the case for the Federal Reserve to keep interest rates low in hopes of boosting the jobs market.

Stocks that have benefited most from low rates, including high-growth tech companies, helped lead the market on Friday. Microsoft rose 1.1%, and Nvidia gained 2% as the tech sector alone accounted for more than 25% of the S&P 500’s gain.

Strong earnings reports also helped to boost the market, as companies continue to turn in blockbuster growth for the first three months of the year. Expedia rose 5.2% after reporting a loss for the first quarter that wasn’t as bad as Wall Street expected and it had better revenue than forecast.

While the sharp slowdown in hiring could calm inflation fears, one measure in the jobs report also showed that wages rose more than economists expected last month.

In European stock markets, France’s CAC 40 rose 0.5%, while Germany’s DAX returned 1.3%. In Asia, stocks in Shanghai fell 0.7% and Hong Kong’s Hang Seng slipped 0.1%.

China reported its trade with the United States and the rest of the world surged by double digits in April as consumer demand recovered, but growth appeared to be slowing.

Japan’s benchmark Nikkei 225 recouped early losses to edge up nearly 0.1%, while South Korea’s Kospi gained 0.6%.