US close: Dow, S&P hit new records after surge in non-farm payrolls

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LONDON (ShareCast) - - Non-farm payrolls rise 288k, jobless rate falls to 6.1%
- Dow, S&P hit new highs
- Jobless claims broadly in line, trade deficit narrows
- Markets closed on Friday

Dow Jones: 0.54%
Nasdaq: 0.63%
S&P 500: 0.53%

Despite being open for just half a day, US stock markets raced ahead to record highs once again on Thursday, sparked by a jobs report that smashed economists' expectations.

Ahead of the long weekend and the July 4th public holiday, the Dow Jones Industrial Average finished 0.5% higher at a new high of 17,068 when markets closed at 13:00 in New York, breaking the physcologically-important level of 17,000 for the first time in history.

The S&P 500 also jumped 0.5% to an all-time high of 1,985, while the Nasdaq ended 0.6% higher at 4,486.

The record highs are "a testament to the optimistic outlook of global markets and the underlying strength of the US economy, although there will be those warning that stocks are too pricey at current levels," said Chris Beauchamp, Market Analyst at IG (LSE: IGG.L - news) .

"Central bankers still seem to be giving a clear signal that policy will remain loose - clearly, the bull market isn't done yet."

Jobs report

The US economy added an impressive 288,000 jobs in June up from a revised 224,000 in May, according to the Bureau of Labor Statistics (BLS), while the unemployment rate dropped to its lowest mark in over five and a half years.

The consensus estimate was for non-farm payrolls to rise by just 215,000, though analysts had widely expected figures to beat forecasts after a much higher-than-expected reading of private-sector payrolls by ADP Research Institute on Wednesday.

Meanwhile, the jobless rate unexpectedly declined from 6.3% to 6.1%, its lowest since September 2008, as the number of unemployed persons fell by 325,000 to 9.5m. The unemployment rate is now 1.4 percentage points lower than it was a year ago.

Analysts at Barclays (LSE: BARC.L - news) said that the data is unlikely to prompt the Fed to adjust the rate of tapering. However, given that the Fed's year-end forecast for the jobless rate was 6.0-6.1%, "there is a risk that the FOMC will raise rates before our expected first hike in June 2015" if unemployment continues to fall faster than it predicts. They said this could be the case especially if core inflation moves about the Fed's 2% target early next year "as we expect".

In other economic data, initial weekly US jobless claims ticked up 2,000 last week to 315,000, broadly in line with the 313,000 estimate. Figures continue to show a broad improvement in the labour market as they have fluctuated at post-recession lows for the last few months.

The US trade deficit narrowed to $44.4bn in May, from $47.0bn the month before, better than the $45.0bn forecast.

The ISM non-manufacturing index slipped to 56.0 in June from 56.3 in May; analysts had expected no change.

Banks, insurers rise

Banking stocks performed well during the session on the back of the improved outlook for the economy, with Goldman Sachs (NYSE: GS-PB - news) , Citigroup (NYSE: C - news) and Bank of America (Other OTC: BACYL - news) on the rise.

Insurers including Metlife (NYSE: MET - news) , Travelers and Amtrust were also making gains.

Business process services firm Synnex (NYSE: SNX - news) fell sharply after it disappointed investors with its third-quarter outlook, overshadowing second-quarter earnings that beat expectations.

Nanomedicine group Bind Therapeutics (NasdaqGS: BIND - news) also slumped after ending its collaboration with Amgen (Xetra: 867900 - news) to develop a targeted cancer therapy.


S&P 500 - Risers
Petsmart Inc (NasdaqGS: PETM - news) . (PETM) $67.28 +12.50%
PACCAR Inc (NasdaqGS: PCAR - news) . (PCAR) $67.25 +5.44%
Lorillard Inc (NYSE: LO - news) . (LO) $64.41 +5.33%
Cliffs Natural Resources Inc (NYSE: CLF - news) . (CLF) $16.42 +4.45%
E*TRADE Financial Corp. (ETFC) $22.77 +2.85%
Omnicom Group Inc (NYSE: OMC - news) . (OMC) $73.38 +2.79%
Bed Bath & Beyond Inc (NasdaqGS: BBBY - news) . (BBBY) $59.35 +2.68%
Charles Schwab Corp. (SCHW) $28.10 +2.55%
Cummins Inc (NYSE: CMI - news) . (CMI) $157.75 +2.44%
Expedia Inc (NasdaqGS: EXPE - news) . (EXPE) $82.21 +2.43%

S&P 500 - Fallers
Public Service Enterprise Group Inc. (PEG) $38.16 -2.53%
Entergy Corp. (ETR) $76.97 -2.15%
Exelon Corp. (EXC) $33.97 -1.79%
NextEra Energy Inc (NYSE: NEE - news) . (NEE) $98.22 -1.48%
Ameren Corp. (AEE) $39.28 -1.43%
Sempra Energy (NYSE: SRE - news) (SRE) $100.73 -1.41%
Dominion Resources Inc (NYSE: D - news) . (D) $68.66 -1.41%
TECO Energy Inc (NYSE: TE - news) . (TE) $17.86 -1.33%
PG&E Corp. (PCG) $46.03 -1.29%
CMS Energy Corp (NYSE: CMS - news) . (CMS (HKSE: 0867-OL.HK - news) ) $29.74 -1.16%

Dow Jones I.A - Risers
Goldman Sachs Group Inc. (GS (KSE: 078935.KS - news) ) $169.46 +1.54%
Caterpillar Inc (NYSE: CAT - news) . (CAT (Taiwan OTC: 4990.TWO - news) ) $111.08 +1.39%
Unitedhealth Group Inc. (UNH) $83.35 +1.04%
Exxon Mobil Corp. (XOM) $102.59 +1.00%
General Electric Co. (GE) $26.86 +0.94%
Nike Inc (Sao Paolo: NIKE34.SA - news) . (NKE) $78.45 +0.85%
Visa Inc (Xetra: 3V64.DE - news) . (V) $216.51 +0.78%
Chevron Corp. (CVX) $131.19 +0.74%
Boeing Co (NYSE: BA - news) . (BA) $128.51 +0.70%
E.I. du Pont de Nemours and Co. (DD) $65.80 +0.67%

Dow Jones I.A - Fallers
Johnson & Johnson (NYSE: JNJ - news) (JNJ) $105.42 -0.42%
Microsoft Corp. (MSFT) $41.80 -0.24%
Coca-Cola Co. (KO) $42.23 -0.14%

Nasdaq 100 - Risers
PACCAR Inc. (PCAR) $67.25 +5.44%
Bed Bath & Beyond Inc. (BBBY) $59.35 +2.68%
Expedia Inc. (EXPE) $82.21 +2.43%
NetApp Inc (NasdaqGS: NTAP - news) . (NTAP) $37.83 +1.94%
KLA-Tencor Corp. (KLAC) $74.62 +1.88%
Staples Inc (NasdaqGS: SPLS - news) . (SPLS) $11.26 +1.81%
Vimpelcom Ltd Ads (VIP) $8.70 +1.64%
Fastenal Co. (FAST) $50.08 +1.56%
Amgen Inc. (AMGN) $122.85 +1.50%
Twenty-First Century Fox Inc Class A (FOXA) $36.21 +1.43%

Nasdaq 100 - Fallers
Mylan Inc (NasdaqGS: MYL - news) . (MYL) $51.79 -0.67%
Autodesk Inc (NasdaqGS: ADSK - news) . (ADSK) $56.88 -0.44%
Facebook Inc (NasdaqGS: FB - news) . (FB) $66.29 -0.24%
Microsoft Corp. (MSFT) $41.80 -0.24%
Micron Technology Inc (NasdaqGS: MU - news) . (MU) $33.73 -0.09%
Tesla Motors Inc (Xetra: A1CX3T - news) (TSLA) $229.25 -0.08%
Alexion Pharmaceuticals Inc (NasdaqGS: ALXN - news) . (ALXN) $164.21 -0.01%
Sigma-Aldrich Corp. (SIAL) $102.15 -0.00%

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