US Stocks Rally to Records Despite Jobs05/07 15:59

   Stocks rallied to more records on Wall Street Friday as a stunningly 
disappointing report on the nation's job market signaled to investors that 
interest rates will likely stay low.

   (AP) -- Stocks rallied to more records on Wall Street Friday as a stunningly 
disappointing report on the nation's job market signaled to investors that 
interest rates will likely stay low.

   The S&P 500 rose 0.7%, topping the previous all-time high set last month. 
The Dow Jones Industrial Average set a record high for the third straight day.

   Technology companies accounted for a big share of the broad rally, which 
included solid gains by stocks in the energy, industrial, and consumer 
discretionary sectors. The gains helped the S&P 500 notch its eighth weekly 
gain in the last 10 weeks.

   Voices up and down Wall Street acknowledged that Friday morning's jobs 
report was a massive disappointment. It's usually the market's most anticipated 
economic data of each month, and it showed employers added just 266,000 jobs in 
April. That was far fewer than the 975,000 jobs that economists expected and a 
steep slowdown from March's hiring pace of 770,000.

   "It was a bit of a shock when that headline number hit, but you realize most 
of, if not all of it, is the result not necessarily of demand, but supply," 
said Peter Essele, head of portfolio management for Commonwealth Financial 
Network. "There seems to be a bit of a labor shortage at the moment."

   The weak report jolted the bond market and initially sent yields tumbling. 
The yield on the 10-year Treasury briefly dropped below 1.49%, toward its 
lowest level in two months before recovering. By the market's close it was 
unchanged from 1.56% late Thursday.

   Many analysts said they don't want to put too much emphasis on just one 
month of discouraging data. They still expect the economy to strengthen 
mightily as coronavirus vaccinations roll out. The weak jobs number also 
bolsters the case for the Federal Reserve to keep interest rates low in hopes 
of boosting the jobs market.

   The S&P 500 index rose 30.98 points to 4,232.60, its third straight gain. 
The Dow Jones Industrial Average gained 229.23 points, or 0.7%, to 34,777.76. 
The Nasdaq composite picked up 119.39 points, or 0.9%, to 13,752.24.

   Small company stocks also got a solid bump. The Russell 2000 index outgained 
the major stock indexes, climbing 30.21 points, or 1.4%, to 2,271.63.

   Low rates have been a huge reason for the stock market's recovery from its 
pandemic low in March 2020. One of the market's biggest fears in recent months 
has been that a supercharged economy could lead to higher, persistent inflation 
and force the Federal Reserve to raise rates. The central bank has been holding 
short-term rates at a record low and buying $120 billion in bonds every month.

   After Friday morning's jobs report, investors pared back bets that the 
Federal Reserve will raise rates soon. Now they see just a 7% chance of an 
increase in the federal funds rate by the end of the year, down from the 15% 
probability they were seeing a month ago, according to CME Group.

   The April jobs data also decreases the likelihood that the consumer price 
index will have much impact on the Fed's interest rate policy, even if the 
report shows a strong pickup in inflation, as economists expect, said Jay 
Hatfield, CEO of InfraCap Funds.

   "We were pretty nervous about this report and the inflation report next 
week," he said. "The Fed is probably on hold through the end of the summer, and 
that's extremely bullish."

   Stocks that have benefited most from low rates, including high-growth tech 
companies, helped lead the market on Friday. Microsoft rose 1.1%, and Nvidia 
gained 2% as the tech sector alone accounted for more than 25% of the S&P 500's 
gain.

   Strong earnings reports also helped to boost the market, as companies 
continue to turn in blockbuster growth for the first three months of the year.

   Expedia rose 5.2% after reporting a loss for the first quarter that wasn't 
as bad as Wall Street expected, and it had better revenue than forecast.

   While the sharp slowdown in hiring could calm inflation fears, one measure 
in the jobs report also showed that wages rose more than economists expected 
last month.

   In European stock markets, France's CAC 40 rose 0.5%, while Germany's DAX 
returned 1.3%. The FTSE 100 in London gained 0.8%.

   In Asia, stocks in Shanghai fell 0.7% and Hong Kong's Hang Seng slipped 0.1%.

   China reported its trade with the United States and the rest of the world 
surged by double digits in April as consumer demand recovered, but growth 
appeared to be slowing.

   Japan's benchmark Nikkei 225 recouped early losses to edge up nearly 0.1%, 
while South Korea's Kospi gained 0.6%.

   Japan has decided to extend its state of emergency to curb the spread of 
COVID-19 infections, which kicked in last month in some urban areas, with 
people asked to stay home and restaurants to close early. The emergency will 
continue through the end of the month, instead of ending May 11, officials said.

   Worries are growing that Japan's medical system is being stretched thin, 
straining its ability to roll out vaccinations and treat rising numbers of 
infections. About 2% of the 126 million people in Japan have been inoculated so 
far. Opposition is growing against the Tokyo Olympics, set to open in July, 
with doubts growing whether the government can make good on its promise to have 
the elderly vaccinated by then.