Strong Hiring, Quarterly Earnings Boost Stocks

By The Coeur d'Alene Press

– U.S. stocks rose Friday after the Labor Department said hiring remained solid in July and strong quarterly earnings continued to boost the market.

U.S. employers added 157,000 jobs last month, fewer than analysts expected. But the Labor Department said more jobs were added in May and June than it previously reported. That made up for the shortfall in July.

There was little reaction to China’s threat to put tariffs on $60 billion in U.S. goods. Larger multinational companies climbed while smaller, U.S.-focused companies lagged the rest of the market. That’s the opposite of what generally happens when investors are worried about trade tensions.

Bond prices edged higher, sending yields lower. Food companies and other big-dividend stocks rose.

Brad McMillan, chief investment officer for Commonwealth Financial Network, said the data show the economy is likely to keep expanding, but it’s not heating up in a way that would push the Federal Reserve to raise interest rates more quickly.

“That’s exactly what the market wants to see,” he said. “This report is right in the sweet spot.”

The S&P 500 index rose 13.13 points, or 0.5 percent, to 2,840.35. The Dow Jones Industrial Average gained 136.42 points, or 0.5 percent, to 25,462.58. The Nasdaq composite rose 9.33 points, or 0.1 percent, to 7,812.01. The Russell 2000 index of smaller-company stocks lost 8.73 points, or 0.5 percent, to 1,673.37.

The benchmark S&P 500 rose for the fifth week in a row. Some of those gains have been small, but that’s the longest winning streak for the index this year.

The slightly weak jobs report reflected the bankruptcy of Toys R Us and job cuts in local governments, which dragged down the hiring totals.

Hourly wage growth remained modest in July, and inflation-adjusted wages are actually decreasing because inflation has gradually picked up. McMillan, of Commonwealth, said another reason for the slip is that companies are hiring people with lower education levels because there are more of those workers available. While low or stagnant wages are good for company profits and stock prices, it could pose a problem for the economy.

“One of the real questions going forward is whether in fact consumers can keep spending at the rate they have,” he said.

Kraft Heinz climbed after the maker of Oscar Mayer meats and Jell-O pudding said improved sales in Europe and Asia helped offset weaker results from the U.S. and Canada. The New York Post also reported that Kraft has had talks with Campbell Soup about a possible deal.

The Post said Kraft hasn’t made an offer. Kraft Heinz gained 8.6 percent to $64.48 and Campbell rose 2.5 percent to $42.76.

This article provided by NewsEdge.