Despite the Dow’s slide Friday, the index was up 0.9% on the week and off less than 1% from its all-time closing high set on Wednesday. The S&P 500 fell 2.54 points, or 0.1%, to 1881.14 on Friday, while the Nasdaq Composite Index dropped 3.55 points, or 0.1%, to 4123.90.
The U.S. economy added 288,000 jobs in April, the Commerce Department reported, the fastest pace in more than two years and well above economists’ median forecast of 215,000. February and March saw more payrolls added than originally reported. US employers hired new staff at the fastest pace in more than two years in April, offering fresh signs of gathering momentum in the world’s largest economy.
The economy added 288,000 jobs last month, the most since 2012 and much more than the 218,000 expected by economists. The jobs report also contained upward revisions for February and March, worth a combined 36,000 jobs, while the unemployment rate fell to 6.3 per cent.
The Federal Reserve will see the buoyant figures as vindication of its decision to continue reducing or “tapering” its asset buys at a rate of $10 billion a month. It has cut the pace of quantitative easing by almost half – from $85 billion a month in December to $45 billion – and is on track to end the programme entirely this year.
This week, data showed growth in the US economy had essentially stalled in the first quarter – expanding at an annualised rate of 0.1 per cent. Yet many economists dismissed this as a blip caused by an extreme winter and argued that the US would perform more strongly in the second quarter and the rest of the year.
Assets seen as safe havens rallied, despite the better-than-expected payroll numbers. Treasury bonds rose, sending the 10-year yield to a three-month low of 2.59%. Gold futures rallied 1.5% to settle at $1,302.60 an ounce.
But shares of utilities, which often move in tandem with Treasury prices, tumbled. Such shares in the S&P 500 fell 2%, for their biggest daily slide since June 2013. The sector remains the best-performing in the index, up 12% on the year before dividends.
European markets fell slightly, as an escalation in tension between Ukraine and Russia was partially offset by upbeat manufacturing data. The Stoxx Europe 600 inched down 0.2%. Ukraine launched a military operation Friday to regain control of the pro-Russian rebel stronghold of Slovyansk.
Asian markets were mixed, with Japan’s Nikkei Stock Average slipping 0.2% and Hong Kong’s Hang Seng Index rising 0.6%. Mainland Chinese stock markets were closed for a holiday.
Among stock movers, LinkedIn fell 8.4% after the professional social network reported late Thursday first-quarter adjusted earnings and revenue that topped analyst estimates, but provided a downbeat sales outlook for the current quarter and full year.
Pfizer edged down 1.3% after U.K. drug company AstraZeneca rejected Pfizer’s improved buyout offer, worth more than $106 billion.
In other corporate news, Wynn Resorts rallied 7.3% after the casino operator exceeded first-quarter earnings and revenue estimates, boosted by increases in occupancy, daily rates and operating margins.
Alternative asset manager Ares Management slipped 2.1% in its trading debut. Late Thursday, the firm’s smaller-than-planned initial public offering priced below its forecast.