New York: Stocks are pushing higher on Wall Street Friday after a lukewarm report on the job market raised hopes the Federal Reserve will keep the accelerator floored on its support for the economy.
U.S. employers added 559,000 jobs in May, according to the Labor Department. It’s an improvement from April’s sluggish gain, though it still fell short of economists forecasts.
The report also showed that companies are still struggling to find enough workers as the economy rapidly recovers from the pandemic recession. People are either looking for better jobs than they had before the pandemic, retiring early, worried about child care or otherwise taking time on the sidelines from the job market.
The S&P 500 rose 0.7per cent as of 10:57 a.m. Eastern. The Dow Jones Industrial Average rose 142 points, or 0.4per cent, to 34,719 and the Nasdaq rose 1.3per cent.
The early gains put the benchmark S&P 500 index back on track for a weekly gain after several choppy days of trading.
Technology stocks were biggest gainers and doing the most to push the broader market higher. Microsoft rose 1.9per cent and Oracle rose 3.1per cent.
Communications companies and health care companies also made solid gains. Banks lagged the market as bond yields edged lower.
The yield on the 10-year Treasury fell to 1.57per cent from 1.62per cent late Thursday. The dip weighed on banks, but helped push tech stocks higher.
Lower interest rates help stocks generally because they can steer some investors away from bonds that are paying little in interest toward riskier investments.
Stocks that look the most expensive based on their earnings, such as technology companies, can be among the biggest beneficiaries.
The latest jobs report is another sign that the economy continues recovering, but employment is relatively shaky and struggling to get back to pre-pandemic levels.
It may have also opened the door for the Fed to keep up its efforts, which include monthly bond purchases to keep interest rates low.
Investors have been worried about rising inflation becoming a long-term issue, rather than the temporary effect from the recovering economy. They are also worried that The Fed could consider pulling its support for the economy if inflation runs too hot.
Inflation has already burst higher across the economy, with prices rising for everything from used automobiles to restaurant meals. Employers are also finding it harder to attract employees, which could force them to raise wages, also adding to inflation.