U.S. stocks closed higher on Friday, with the Dow ending at a record for an eighth straight session following a read on the labor market that came in above expectations, a sign that current valuations may be supported by current economic activity.
The Dow Jones Industrial Average DJIA, +0.30% gained 66.71 points, or 0.3%, to 22,092.81, finishing at its highs of the session, which also represented an intraday record. The blue-chip average has risen for a nine straight trading days, its longest such streak since February. With the day’s record, it has now posted 34 record closes thus far this year.
The S&P 500 SPX, +0.19% rose 4.67 points, or 0.2%, to 2,476.83, while the Nasdaq Composite Index COMP, +0.18% climbed 11.22 points, or 0.2%, at 6,351.56. All three indexes dipped into slightly negative territory within the first hour of trading, but subsequently rebounded, ending near their highs of the session.
Gains were spurred by the July payrolls report, which showed the U.S. created 209,000 new jobs in July, easily beating Wall Street forecasts for 175,000 jobs. Separately, the unemployment rate moved to 4.3% from 4.4%, retouching a 16-year low.
“There are some concerns that we’re fully valued, but we’re of the thesis that markets will continue to grind higher until the end of the year,” said Jeff Zipper, managing director of investments at U.S. Bank Private Client Wealth Management. “Corporate earnings show that both the top line and the bottom line are coming in nicely, which justifies where we’re trading.”
The report is seen as crucial for the Federal Reserve as it decides whether to raise interest rates one more time this year. After a string of lackluster economic readings recently, investors are starting to doubt further monetary tightening is in the cards in the short term, especially absent signs of rising inflation. Those doubts have helped send the dollar sharply lower.
However, the buck was enjoying a bit of a resurgence, with the ICE U.S. DollarDXY, +0.75% a measure of the buck against a basket of a half-dozen currencies, up 0.7%.
“The number came in above consensus, but in the ballpark we were expecting, so we’re taking it in stride,” Zipper said. “There were no big surprises, and net-net, I think the Federal Reserve remains on track for one more interest rate hike this year after this.”
For the week, the Dow rose 1.2%, its second straight weekly rise, as well as its fourth positive week of the past five. The S&P rose 0.2% on the week, while the Nasdaq ended lower by 0.4%. The S&P is less than half a percentage point away from its own record, while the Nasdaq is less than 2 percentage points below its own.
Stock movers: Shares of GoPro Inc. GPRO, +19.25% jumped 19.3% after the wearable video-camera maker’s quarterly results and outlook out late Thursdaybeat Wall Street estimates. Friday marked the biggest one-day percentage gain for the company since July 2014.
In earnings on Friday, Cigna Corp.’s CI, -1.99% profit came in well ahead of forecasts, and the health care insurance company raised its 2017 outlook. Shares slipped by 2%.
U.S.-listed shares of Royal Bank of Scotland Group PLC RBS, +0.88% gained 0.9% after the U.K. bank posted its first half-year profit in three years.