US open: Stocks gain after non-farm payrolls smash estimates
Updated : 15:09
US stocks gained on Friday as the July non-farm payrolls report came in much better than expected.
At 1434 BST the Dow Jones Industrial Average rose 0.55%, the S&P 500 increased 0.46% and the Nasdaq edged up 0.55%.
In contrast, oil prices retreated with West Texas Intermediate crude down 1.18% to $41.44 per barrel and Brent down 1.02% to $43.84 per barrel at 1508 BST.
US employers added 255,000 jobs in July, smashing forecasts of 180,000, the Labor Department’s non-farm payrolls report revealed. It followed an upwardly revised 292,000 increase in June.
The unemployment rate was unchanged at 4.9% in July, compared to estimates of 4.8%. Average hourly earnings rose 0.3% on the month, beating estimates for a 0.2% increase and following a 0.1% rise in June. On the year, hourly earnings growth in July was unchanged at 2.6%, as expected.
“The steady job market improvement and keeps alive the possibility of the Fed hiking rates again this year, but worries about sluggish economic growth and deteriorating productivity, as well as uncertainty created by the presidential election, suggests that any tightening of policy will be delayed until December,” said Chris Williamson, chief business economist at IHS Markit.
“The problem facing the Fed is that the ongoing robust rate of job creation is taking place against a backdrop of weak output growth, suggesting productivity and profit margins are likely to be suffering.”
The CME FedWatch tool indicates an 18% chance of an interest rate rise in September, a 20% chance in November and 43% in December.
On the corporate front, Zygna shares dropped after the videogame developer released a weak outlook on third quarter revenues.
FireEye slumped after the security software company reported quarterly sales that missed its own forecast and announced plans to cut 300 to 400 jobs.
Liberty Media Corp. as it reported strong quarter results, with a 10% increase in revenue and a 13% rise in earnings.
GoDaddy continued to rise after reporting a narrower loss for the second quarter on Wednesday.