October 1, 2014
Jobs report takes Dow, S&P to fresh record highs
US stocks rose today, with the Dow and the S&P 500 closing at records, after the May payrolls report provided the latest confirmation of improving economic conditions.
The CBOE Volatility index VIX, Wall Street's so-called fear gauge, ended down 8.1 percent at 10.73, its lowest level since February 2007.
The VIX, which tends to rise when volatility increases or the market drops, has been on the decline for months and is well below its historical average of 20, which some see as a sign that investors are ignoring concerns that could derail the rally.
The day's gains were broad and led by cyclical sectors, which outperform in times of economic expansion. Industrial shares jumped 1 percent while energy shares rose 0.8 percent. The only S&P 500 sector that fell was healthcare, a defensive group, down 0.1 percent.
About 217,000 jobs were added in May, slightly fewer than expected, while the unemployment rate held steady at 6.3 percent. This was the first time job growth has topped 200,000 for four consecutive months since January 2000.
The Dow Jones industrial average rose 88.17 points or 0.52 percent, to 16,924.28, the S&P 500 gained 8.98 points or 0.46 percent, to 1,949.44 and the Nasdaq Composite added 25.17 points or 0.59 percent, to 4,321.40.
With the day's gains, the S&P 500 marked its sixth record close in the past seven sessions.
For the week, the Dow rose 1.2 percent, the S&P 500 rose 1.3 percent and the Nasdaq rose 1.9 percent.
Markets also were buoyed after the ECB on Thursday cut interest rates, including taking deposit rates for banks below zero, and pledged hundreds of billions more euros in cheap funds for banks.
MSCI's all-country stock index rose 0.53 percent. The FTSEurofirst 300 index of top European shares rose 0.6 percent to close at 1,388.48.
US Treasuries prices gained and German bund futures hit session highs of 145.99 after the US jobs data, up 98 ticks on the day. Benchmark 10-year Treasuries retreated, down 4/32 in price to yield 2.5986 percent.
The US dollar recouped losses as investors added to a well-worn pattern of borrowing greenbacks to buy higher-yielding currencies after the solid US jobs data left few chances the Federal Reserve would speed up monetary tightening.
The euro gyrated after the data, initially selling off but then rising briefly to a two-week high of $1.3677. It settled back to $1.3638, down 0.15 percent.
US crude oil futures rose as the US jobs report bodes well for future oil demand. Brent fell 18 cents to $108.61 a barrel. US crude rose 18 cents to settle at $102.66 a barrel.