Dow, S&P 500 hit record highs after the strong jobs report

August 9, 2021: -On Friday, stocks tied to the economic recovery rose after a stronger-than-expected jobs report, sending two key market averages to all-time highs.

The Dow Jones Industrial Average increased 155 points, or 0.4%, and hit a record high. The S&P 500 rose 0.2% for its all-time intraday high, while the tech-heavy Nasdaq Composite was down 0.2%.

According to the Labor Department, Friday’s jobs report showed that the U.S. economy added 943,000 jobs in July. Economists expected the economy to have added 845,000 jobs last month, according to estimates from Dow Jones. The rates of unemployment dropped to 5.4%, below the forecast of 5.7%.

Bank shares led the gains post-jobs report as rates shot higher, surging their profitability prospects. Industrials, retailers, and energy stocks also gained as the jobs report soothed things about the economic comeback. JPMorgan, Bank of America, and Wells Fargo all gained over 1% in the trading.

Amazon, Apple, and Salesforce were trading lesser slightly in the trading. On the flip side, tech shares came down as the jump in rates caused investors to take profits in the names and move back into stocks that could benefit faster economic growth. Higher rates can also expose tech stock lofty valuations.

“This is a strong report. It is going to cement the view that the Fed is not far off giving advance notice of a tapering announcement,” the deputy chief economist for Aberdeen Standard Investments, James McCann, said.

“Powell may well use the meeting of central bank policymakers in Jackson Hole later this month to provide coming hints, but made clear that these jobs reports are a cornerstone in the thinking on tightening policy,” he added.

The jobs report also introduced movement in the bond market. 10-year Treasury yield continued its latest streak of volatile trading, increasing to 1.28% after the report. The benchmark yield traded at 1.13% sooner this week. Yields move inverse to prices.

On Friday, a caught-up week of earnings continued with several special reports, including Canopy Growth, AMC Networks, Draftkings, Norwegian Cruise Line, and Goodyear Tire.

Shares of Expedia decreased over 9% after the travel company’s earnings per share missed expectations in its quarterly report.

On Thursday, 427 S&P 500 components have posted quarterly results, with 88% topping earnings estimates, according to data from Refinitiv. Regarding revenue, 87% have exceeded expectations.

Stocks finished the session of Thursday in the green, with the S&P 500 climbing 0.6% to close at a new record. The Dow got a profit of 271.58 points or 0.78%. The Nasdaq Composite also advanced 0.78% for its fourth straight positive session.

For this week, the Dow is up 0.4%. The S&P and Nasdaq are up 0.77% and 1.5%, respectively.