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June 4, 2021
By Medha Singh and Shashank Nayar
(Reuters) – U.S. stocks rose on Friday, with technology shares leading the way, as weaker-than-expected jobs growth eased concerns about the economy running too hot and causing an early tightening of monetary policy.
The Labor Department’s closely watched report showed nonfarm payrolls increased by 559,000 jobs last month, helped by vaccinations and a reopening economy, following an unexpected slowdown in the labor market in April.
Economists polled by Reuters had forecast 650,000 new jobs in May.
“The jobs data has helped calm investor nerves about inflation fears,” said Josh Wein, portfolio manager at Hennessy Funds.
“Inflation fears are overblown, and it is more of a labor participation issue right now rather than fears of an overheating economy as the problem lies on the supply side and not on demand.”
Worries that a robust economic rebound could lead to a prolonged period of inflation and prompt the Fed to contemplate paring back its crisis level support have weighed on investors’ minds recently.
The S&P technology sector firmed 1.4% and other high-growth companies also advanced as longer-dated U.S. bond yields eased. [US/]
Wall Street’s main indexes were set to rise for at least second straight week on optimism about an economic rebound amid a raft of encouraging data this week.
At 10:00 a.m. ET, the Dow Jones Industrial Average was up 86.23 points, or 0.25%, at 34,663.27 and the S&P 500 was up 24.64 points, or 0.59%, at 4,217.49. The Nasdaq Composite was up 144.78 points, or 1.06%, at 13,759.29.
So-called “meme-stocks” weakened in early trade, with AMC Entertainment down nearly 3% a day after the Reddit darling completed its second share offering this week.
Shares of Koss Corp and GameStop dropped between 2% and 5%.
Billionaire William Ackman’s Pershing Square Tontine Holdings dropped 9.7% on talks to buy 10% of Universal Music Group in a deal that would value the label at $40 billion and make it the largest ever investment by a blank-check vehicle.
Advancing issues outnumbered decliners by a 1.77-to-1 ratio on the NYSE and by a 1.50-to-1 ratio on the Nasdaq.
The S&P index recorded 42 new 52-week highs and no new lows, while the Nasdaq recorded 61 new highs and eight new lows.
(Reporting by Medha Singh and Shashank Nayar in Bengaluru, additional reporting by Stephen Culp in New York; Editing by Maju Samuel)