NEW YORK, May 3 — Wall Street’s main indexes advanced today after a softer-than-expected jobs report revived hopes of the Federal Reserve cutting interest rates this year, while gains in Apple and Amgen on upbeat corporate updates added support.
US job growth slowed more than expected in April and the increase in annual wages fell below 4 per cent for the first time in nearly three years, while the unemployment rate stood at 3.9 per cent compared with expectations that it would remain steady at 3.8 per cent.
“The data is soft across the board from the Fed’s perspective, which is what really matters and an unemployment rate of 3.9 per cent is not something disastrous,” said Jason Pride, chief of investment strategy and research at Glenmede.
“This indicates an economy that is not declining dramatically, but it definitely indicates a looser labour market.”
Traders added to bets that the Fed will deliver its first interest rate cut this year in September.
Yields across government bonds fell after the data, with the yield on the 10-year note last at 4.5036 per cent.
The CBOE Volatility index, also known as Wall Street’s “fear gauge”, touched its lowest level in a month.
The latest economic data follows the Fed’s more dovish-than-expected interest rate guidance in its latest policy meeting, which caused US stocks to rally on Thursday.
Separately today, the US services sector contracted in March, while a measure of prices paid by businesses for inputs jumped, a worrisome sign for the outlook on inflation.
Apple jumped 6 per cent, outpacing other megacap stocks after the iPhone maker unveiled a record US$110 billion share buyback programme and beat modest expectations for quarterly results and forecast.
Amgen climbed 12.1 per cent as the biotechnology firm said it was very encouraged after completing an interim analysis of its mid-stage study of experimental weight-loss drug MariTide and as it reported first-quarter earnings.
At 10.02am ET, the Dow Jones Industrial Average rose 481.28 points, or 1.26 per cent, to 38,706.94, the S&P 500 gained 58.48 points, or 1.15 per cent, to 5,122.30, and the Nasdaq Composite gained 303.94 points, or 1.92 per cent, to 16,144.89.
Nine of the 11 major S&P 500 sectors were trading higher, with information technology and real estate stocks among the top gainers.
Block rose 5.4 per cent after the Jack Dorsey-led payments fintech firm lifted its full-year adjusted core earnings forecast and revealed plans to add more bitcoins to its balance sheet.
Expedia fell 13 per cent after the online travel agency cut its full-year revenue growth forecast as gross bookings were hit by a drag in its vacation rental platform.
Of the 397 companies in the S&P 500 that have reported earnings to date in the first quarter, 76.8 per cent beat analysts’ expectations, compared with the historical average of 67 per cent, according to LSEG data.
Advancing issues outnumbered decliners for a 5.7-to-1 ratio on the NYSE and a 3.52-to-1 ratio on the Nasdaq.
The S&P 500 posted 17 new 52-week highs and one new low, while the Nasdaq recorded 86 new highs and 24 new lows. — Reuters
