U.S. equities finished the week and the first trading day of September with a gain Friday, on expectations that a weaker-than-expected rise in August nonfarm payrolls could dull the Federal Reserve’s desire to further raise borrowing costs in 2017.
The Dow Jones Industrial Average
finished up 39.46 points, or 0.2%, at 21,987.56, powered by moves in General Electric Co.
and Nike Inc.
recording a weekly gain of 0.8%. The SP 500
ended at 2,476.55, up 4.9 points, or 0.2%, supported by the energy and materials and financial sectors, for a weekly gain of 1.4%.
Read: What will we see first: Dow 30,000 or bitcoin $30,000?
The technology-laden Nasdaq Composite Index
rose 6.67 points, or 0.1%, to finish at 6,435.33 after briefly dipping into negative territory in early action. On the week, the index rose 2.7%, the biggest weekly gain since December.
Trading activity was light, with volume subsiding after an initial rush of data as traders prepared for the three-day Labor Day weekend. U.S. financial markets are closed Monday.
“You can basically see the volume decrease by the hour,” said Art Hogan, chief market strategist at Wunderlich.
“It’s hard to draw any real conclusions on the activity in the market this week because volumes are just so low,” Hogan added, saying that it was hard to tell how exactly equities were feeling about Friday’s data until volumes pick up again after Labor Day.
Check out: Labor Day: Which markets will be closed?
The U.S. economy added 156,000 jobs in August, compared with the 170,000 expected according to economists polled by MarketWatch. The unemployment rate stood at 4.4% in August, undercutting expectations of 4.3% and rising by 0.1 percentage point from July.
Average hourly wages increased by 0.1% in August versus 0.2% expected and a 0.3% increase in the previous month.
Read: Wage-growth concerns continue after August jobs report
“This report just kind of pushed back every expectation about a rate hike,” said Mike Antonelli, equity sales trader at Robert W. Baird Co. He said the expectation that the Fed might be more hesitant to lift borrowing costs further is supportive to equity markets.
Also read: Economists still expect December rate hike; market has doubts
While the numbers may have disappointed on the face of it, the devil was in the details, according to J.J. Kinahan, chief strategist at TD Ameritrade.
“We haven’t seen a number like that in manufacturing jobs in a while and construction alone also added 28,000 jobs,” he said. “In my opinion this was a very positive report, but the anomaly is the low wage growth.”
The manufacturing sector added 36,000 jobs in August, bringing the total of added jobs to 155,000 since the sector’s most recent low in November 2016.
jumped to a six-year high in August.
The Commerce Department said construction spending fell 0.6% in July but was up 1.8% year-over-year. Economists surveyed by MarketWatch had forecast a 0.6% monthly rise. The University of Michigan said its final gauge of consumer sentiment for August came in at 96.8 versus a preliminary reading of 97.6.
Investors also waded though monthly auto sales figures, giving Ford Motor Co.
General Motors Co.
and Fiat Chrysler Automobiles NV
a reason to see active trading.
Ford reported a 2.1% dip in sales, sending its shares to finish 3% higher. GM, on the other hand, saw a 7.5% increase in August sales. Its stock ended 2.2% higher. Meanwhile, Fiat Chrysler Automobiles reported a 11% decrease in year-over-year sales Still, its shares finished up 5%.
Among non-American car makers, Toyota Motor Corp.
came out on top with sales growing 7%, while Honda Motor Co. Ltd.
reported a decline of 2.4% and Nissan Motor Co. Ltd.
dropped reported a decline in vehicle sales of 13%. Its shares dipped just below 1%.
Total car sales for August amounted to 16.1 million, not quite meeting the forecast for 16.6 million after July’s 16.8 million number.
Check out: MarketWatch’s Economic Calendar
Other markets: European equities
traded higher, and most Asian markets closed with gains. The ICE U.S. Dollar Index
showed little change.
edged higher, while oil futures
Read: Banks continue to lower oil-price expectations
Stocks to watch: Shares in Lululemon Athletica Inc.
rallied to end roughly 7% higher after the athletic-apparel maker on Thursday raised its guidance following a strong performance in the latest quarter.
Enterprise-storage company Nutanix Inc.
shares were up 0.1%, retracing some of its previous gains, after posting better-than-expected quarterly results late Thursday. The tech company specializes in “hyperconvergence,” which refers to combining storage and computing functions in disparate systems through software.
Read more: Nutanix heads for first $1 billion year
Newly merged Dow Chemical Co. and DuPont Co. saw their first trading day as DowDuPont Inc.
with shares up 0.8% to $67.18.
That merger also means the 121-year-old Dow Jones Industrial Average has seen a shift in how it’s calculated, though the company behind the blue-chip barometer said Friday’s change “won’t cause any disruption in the level of the index.”