Stocks Close Mostly Higher Despite Disappointing Jobs Data - U.S. Commentary

(RTTNews) - Stocks moved mostly higher over the course of the trading day on Friday, as trader largely shrugged of a disappointing jobs report. The strength that emerged on Wall Street lifted the S&P 500 to another new record closing high.

The major averages saw further upside going into the close, ending the session at their best levels of the day. The Dow rose 67.78 points or 0.4 percent to 17,137.36, the Nasdaq climbed 20.61 points or 0.5 percent to 4,582.90 and the S&P 500 advanced 10.06 points or 0.5 percent to 2,007.71.

With the gains on the day, the major averages all moved modestly higher for the week. The Nasdaq inched up by 0.1 percent, while the Dow and the S&P 500 both edged up by 0.2 percent.

The markets initially experienced choppy trading following the release of a Labor Department report showing much weaker than expected U.S job growth in the month of August. The Labor Department said non-farm payroll employment increased by 142,000 jobs in August compared to economist estimates for the addition of about 225,000 jobs.

While the report also said employment climbed by an upwardly revised 212,000 jobs in July, employment rose by a downwardly revised 267,000 jobs in June, reflecting a net downward revision of 28,000 jobs.

Buying interest eventually emerged, however, as many analysts suggested the weak job growth is probably just an isolated blip.

Paul Ashworth, Chief U.S. Economist at Capital Economics, said, "Other indicators suggest that labor market conditions are still strengthening and the latest round of survey evidence indicates that economic activity is soaring."

The markets may also have benefited from easing geopolitical concerns amid news that the Ukrainian government and pro-Russian separatists have reached a preliminary ceasefire agreement.

Ukrainian President Petro Poroshenko released a statement announcing the agreement, which was confirmed by the rebels on Twitter.

The ceasefire, which went into effect at 15:00 GMT, was reached following negotiations in the Belorussian capital Minsk.

Sector News

Utilities stocks showed a strong move to the upside over the course of the session, driving the Dow Jones Utilities Average up by 1.2 percent. With the gain, the average reached a two-month closing high.

PG&E (PCG), FirstEnergy (FE), and American Electric Power (AEP) turned in some of the utilities sector's best performances.

Significant strength also emerged among commercial real estate stocks, as reflected by the 1.1 percent gain posted by the Morgan Stanley REIT Index. The gain lifted the index to its best closing level in over a year.

Natural gas, semiconductor, and telecom stocks also saw some strength on the day, moving higher along with most of the other major sectors.

Other Markets

In overseas trading, most stock markets across the Asia-Pacific region saw modest weakness during trading on Friday. Japan's Nikkei 225 Index edged down by 0.1 percent, while Hong Kong's Hang Seng Index dipped by 0.2 percent.

Meanwhile, the major European markets turned in a mixed performance on the day. While the German DAX Index rose by 0.2 percent, the French CAC 40 Index and the U.K.'s FTSE 100 Index fell by 0.2 percent and 0.3 percent, respectively.

In the bond market, treasuries turned lower over the course of the trading session after seeing early strength. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, inched up by 1.3 basis points to 2.461 percent.

Looking Ahead

Following the slew of economic data released over the past week, the economic calendar is relatively quiet for much of next week.

Several key reports are scheduled to be release next Friday, however, with traders likely to keep a close eye on reports on retail sales, import and export prices, and consumer sentiment.