WASHINGTON: U.S. stocks closed higher Friday on a stronger-than-expected February jobs report, but major benchmarks snapped multiweek winning streaks as oil prices weighed on markets over the past five sessions. The S&P 500 index SPX, +0.33% gained 7.73 points, or 0.3%, to close at 2,372.60, as the industrials, utilities and telecom sectors led gainers, while the financials, real-estate and energy sectors weighed on the index. The Dow Jones Industrial Average DJIA, +0.21% advanced 44.79 points, or 0.2%, to close at 20,902.98, with 23 of the 30 blue-chip companies finishing higher. General Electric Co. GE, +2.09% and UnitedHealth Group Inc. UNH, +1.17% led gainers, while Boeing Co. BA, -1.04% and Goldman Sachs Group Inc. GS, -0.72% led decliners. Meanwhile, the Nasdaq Composite Index COMP, +0.39% rose 22.92 points, or 0.4%, to finish at 5,861.73.
For the week, the Dow finished down 0.5%, snapping a streak of four straight weekly gains. The S&P 500 declined 0.4% for the week, and the Nasdaq slipped 0.2%, as both snapped a run of six weeks of consecutive gains. A plunge in oil prices has made for a tough week, with the price now firmly below $50 a barrel for WTI crude CLJ7, -1.81% Crude oil settled down 1.6% at $48.49 a barrel, for a 9.1% decline on the week to their lowest level since November. The decline in oil prices accelerated Friday after active rig-count data showed an increase for the eighth week in a row.
The U.S. economy added 235,000 jobs in February, while the January number was revised to show payrolls rose 238,000, pushing the unemployment rate to 4.7%. Hourly pay increased 2.8% from February 2016 to February 2017, up from 2.6% in the prior month. Weakness in the energy sector is just an extension of oil’s rough week, said Bill Stone, chief investment strategist at PNC Asset Management Group, in an interview. Plus, expectations for rate increases by the Federal Reserve this year may have gotten too high owing to strong jobs data earlier in the week from ADP, Stone said. “I think the ADP report had people thinking payrolls data was going to be a blowout and it wasn’t,” Stone said. “Some people were thinking maybe even four rates this year instead of three.”
Friday’s employment report exceeded consensus forecasts of 221,000, cementing expectations for an interest-rate hike at the Fed’s two-day policy meeting March 14-15. Over the past few weeks, several key Fed members, including Chairwoman Janet Yellen, have said an increase in rates is warranted. “Today’s jobs report is an affirmation of everything else we’ve been seeing on the data front. The fact that it’s construction and manufacturing industries that saw big job gains bodes well for the economy, as the multiplier effect there is higher,” said Karyn Cavanaugh, senior market strategist at Voya Financial. In other words, strong employment in manufacturing can spur job growth in other industries.
