Skip to: Content
Skip to: Site Navigation
Skip to: Search


Stocks rise after tepid jobs news

Stocks rose Friday despite the US adding fewer jobs than forecast in July, curbing optimism that the economy is poised to pick up strength in the second half of the year. Stocks gradually recovered throughout the day and major indexes ended slightly higher. 

By Steve RothwellAP Markets Writer / August 2, 2013

Specialists Joseph Dreyer, left, and Donald Civitanova work on the floor of the New York Stock Exchange. Tepid jobs news barely dented an advance in stocks Friday.

Richard Drew/AP/File

Enlarge

New York

A tepid jobs report Friday barely dented a summer rally on the stock market.

Skip to next paragraph

The Standard & Poor's 500 index ended the week 1 percent higher after breaking through 1,700 points for the first time Thursday. The index has risen for five of the last six weeks. The Dow Jones industrial average rose 0.6 percent and is on a streak of six weekly gains.

On Friday, indexes dropped in early trading after the U.S. added fewer jobs than forecast in July, curbing optimism that the economy is poised to pick up strength in the second half of the year. The market gradually recovered throughout the day and major indexes ended slightly higher. The gains were enough to set all-time highs for the Dow and S&P.

The government reported that 162,000 jobs were created last month, pushing the unemployment rate down to a 4½-year low of 7.4 percent. The number of jobs added was the lowest since March and below the 183,000 economists polled by FactSet were expecting.

Brad Sorensen, Charles Schwab's director of market and sector research, said the jobs report was "moderately disappointing."

"That tepid growth we've seen, (the economy) not being able to reach escape velocity, continues to be the story," Sorenson said.

Investors have been watching economic reports closely and trying to anticipate when the Federal Reserve will start easing back on its economic stimulus. The central bank is buying $85 billion in bonds every month to keep long-term interest rates low and encourage borrowing.

While the jobs report wasn't encouraging, it did make it more likely that the Fed would take its time cutting back on stimulus, said Doug Lockwood of Hefty Wealth Partners. The stimulus from the central bank has been an important factor powering a four-year bull run in stocks.

"As long as there's this concept that the Fed may still need to be involved and stimulate, that's good for both the bond and the stock market," said Lockwood. "You're seeing the trampoline effect; the market drops and then comes back up."

The S&P 500 ended Friday up 2.80 points, or 0.2 percent, to 1,709.67. The index is up 5 percent since the start of July. The Dow Jones industrial average rose 30.34 points, or 0.2 percent, to 15,658.36.

Seven of the 10 industry sectors that make up the S&P 500 gained, led by consumer discretionary stocks. Of the three groups that fell, energy stocks dropped the most.

Investors were also assessing company earnings.

Chevron fell after it became the latest big energy company to disappoint investors with lower earnings. Chevron's profit fell 26 percent to $5.4 billion due to lower oil prices and maintenance work at refineries. The stock fell $1.49, or 1.2 percent, to $124.95.

  • Weekly review of global news and ideas
  • Balanced, insightful and trustworthy
  • Subscribe in print or digital

Special Offer

 

Editors' picks

Doing Good

 

What happens when ordinary people decide to pay it forward? Extraordinary change...

Danny Bent poses at the starting line of the Boston Marathon in Hopkinton, Mass.

After the Boston Marathon bombings, Danny Bent took on a cross-country challenge

The athlete-adventurer co-founded a relay run called One Run for Boston that started in Los Angeles and ended at the marathon finish line to raise funds for victims.

 
 
Become a fan! Follow us! Google+ YouTube See our feeds!