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U.S. stocks jumped Friday and the S&P 500 and Nasdaq closed at record highs after the October jobs report came in well above consensus expectations.
The S&P 500 ended at 3,066.91, a record close, and just 0.04 points below the all-time intraday high it also reached during Friday’s session. The Nasdaq posted a record closing high of 8,386.4. And the Dow ended just 0.04% below its recent closing high from mid-July.
Here’s where markets settled at the end of regular equity trading:
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S&P 500 (^GSPC): +0.97%, or 29.34 points
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Dow (^DJI): +1.11%, or 300.31 points
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Nasdaq (^IXIC): +1.13%, or 94.04 points
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10-year Treasury yield (^TNX): +2.8 bps to 1.719%
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Gold (GC=F): +0.06% to $1,515.70 per ounce
Optimism over progress in a phase one U.S.-China trade deal added to sentiment. The Office of the U.S. Trade Representative said Friday that Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin held a “constructive call” with China’s Vice Premier Liu He about the first portion of a China trade deal, adding that “they made progress in a variety of areas and are in the process of resolving outstanding issues.”
Earlier, the Bureau of Labor Statistics released its October jobs report Friday morning, showing the economy added 128,000 jobs for the month, well above the tepid 85,000 gains expected.
The unemployment rate edged up to 3.6%, as had been expected, increasingly just slightly from September’s 50-year low of 3.5% and reflecting a still-tight labor market. Hourly wages rose by 0.2% month-on-month, or just below the 0.3% gain expected, and 3.0% year-on-year, matching expectations.
“The strength of this report, together with the news earlier this week of a slightly stronger-than-expected 1.9% annualized gain in third-quarter GDP, would seem to support the Fed’s shift to a more neutral policy stance,” Michael Pearce, senior U.S. economist for Capital Economics, wrote in a note.
“Nevertheless, given the continuing weakness in the survey evidence – and with the knowledge that these employment figures are likely to be revised down significantly when the annual benchmark revision is incorporated early next year – the Fed may not be done yet, even though a December rate cut now look less likely,” he added.
Within October’s headline payrolls figure, manufacturing jobs fell by just 36,000, much better than the loss of 55,000 expected.
Consensus economists had anticipated job gains would soften for the month due primarily to the impact of transitory factors like the United Auto Workers strike on General Motors (GM).