On Friday, Wall Street’s main indexes gained as investors looked past December’s lower-than-expected U.S. job additions and took support from indication of an increase in wage growth.
Last month, nonfarm payrolls increased by 148,000 jobs, according to the Labor Department, versus economists’ forecast of 190,000 jobs. Shortly after the report, stock futures scaled back on their gains, which in contrast to Thursday’s data which indicated that private employers added a larger-than-expected 250,000 jobs last month.
Monthly wage gains were upbeat, which indicated the strength of the labor market. This indication may also increase the chance of the Federal Reserve hiking up interest rates in March. The possibility of a March rate hike is 67.5 percent, according to a tool from CME Group, not much of a change following the release of the report.
Average hourly earnings increased 0.3 percent last month following a 0.1 percent gain in October. This elevated the annual increase in wages from 2.4 percent in November to 2.5 percent in December.
“It’s a really weak number, surprising given how strong ADP was on Wednesday. However, it’s only one month. People usually look at the three-month average as it’s usually a better gauge,” said Chris Zaccarelli, a chief investment officer.
THE HERALD FINANCE REPORT
Start your workday the right way with the news that matters most.
“The market will probably overlook this for now. I would look next month for confirmation if it’s a trend” Zaccarelli added.
At 9:40 a.m. ET:
The Dow Jones Industrial Average was up 46.05 points, or 0.18 percent, at 25,121.18. The blue-chip index closed above 25,000 for the first time on Thursday. The S&P 500 was up 4.85 points, or 0.18 percent, at 2,728.84 and the Nasdaq Composite was up 23.43 points, or 0.33 percent, at 7,101.34.
Among the 11 major S&P sectors, energy was the biggest loser, down 0.37 percent as oil prices moved away from their 2015 highs. Chevron and Exxon dropped 0.4 percent, bringing down the sector.
The S&P technology index gained 0.55 percent, leading the gainers. Microsoft’s 1 percent gain and Apple’s 0.6 percent increase boosted the sector. Cisco gained 1.33 percent following BofA Merrill Lynch brokers upgrading of the stock to “buy”.
Advancing issues outnumbered decliners on the NYSE by 1,577 to 982. On the Nasdaq, 1,486 issues rose and 909 fell.