Wall Street's main indexes gained on Friday, as a surge in job additions in April pointed to a solid domestic economy, while a steady rise in wages backed the Federal Reserve's patient view on interest rate hikes.The Labor Department's monthly employment report showed jobs increased by 263,000 last month, while economists polled by Reuters had forecast a 185,000 rise.
The unemployment rate dropped to a more than 49-year low of 3.6 per cent.However, average hourly earnings rose 0.2 per cent in April after rising by the same margin in March and below the anticipated 0.3 per cent rise."The volatility in equities is somewhat reasonable given the headline numbers were pretty surprising and very positive in this environment," said Charlie Ripley, senior market strategist at Allianz Investment Management in Minneapolis."It really reiterates Powell's message on Wednesday, that the economy is in really good shape and inflation is low and that there isn't any need to make changes to policy right now."US stocks eased from their record highs in the past two sessions after the Fed dashed hopes of interest rate cuts this year and oil prices fell.Fed Chairman Jerome Powell's comments on weak inflation as mostly "transient" on Wednesday drove down trader bets of a rate cut this year.At 9:45 am ET the Dow Jones Industrial Average was up 128.14 points, or 0.49 per cent, at 26,435.93.
The SP 500 was up 14.31 points, or 0.49 per cent, at 2,931.83 and the Nasdaq Composite was up 51.01 points, or 0.63 per cent, at 8,087.79.Nearly 400 SP 500 companies have reported so far and three-quarters have topped profit estimates, according to Refinitiv data.
The better-than-expected results have turned around earnings estimate for the first quarter to an almost 1 per cent rise from a 2 per cent decline at the start of April.All the 11 major SP 500 sectors were higher, with a 0.82 per cent rise in consumer discretionary stocks powering the gains.Amazon.com Inc rose 2 per cent, after CNBC reported Warren Buffett's Berkshire Hathaway Inc has bought shares of internet retailing giant for the first time, though he has not been the one doing the buying.Newell Brand Inc shares jumped 8.2 per cent after the consumer goods maker exceeded Wall Street expectations for quarterly adjusted profit as it benefited from cost savings and higher pricing.Cisco Systems Inc dipped 0.3 per cent, after fellow network gear-maker Arista Networks Inc forecast weak current-quarter revenue.
Shares of Arista plunged 15.1 per cent, the most among SP 500 companies.Activision Blizzard Inc fell 4.8 per cent after the videogame maker forecast current-quarter profit below expectations as it puts more money into its franchises to battle competition.Shares of Electronic Arts Inc also declined 3.5 per cent after brokerage MKM Partners downgraded the company's stock to "neutral" from "buy."Advancing issues outnumbered decliners by a 4.50-to-1 ratio on the NYSE and by a 2.60-to-1 ratio on the Nasdaq.