Closing Market Summary: Nasdaq Hits New Record Following February Jobs ReportStocks advanced on Friday, climbing steadily over the course of the session, as investors cheered the Employment Situation Report for February, which showed strong jobs growth while keeping inflation concerns at bay. The Nasdaq Composite climbed 1.8% to finish at a new record high (7560.81), its first record finish since before a volatile round of selling at the beginning of February. Meanwhile, the S&P 500 and the Dow Jones Industrial Average advanced 1.7% and 1.8%, respectively.
Nonfarm payrolls increased by 313,000 in February, blowing past the consensus estimate of 210,000, and the January increase was revised upward to 239,000 (from 200,000). Meanwhile, average hourly earnings increased 0.2%, as expected, which brought the year-over-year increase down to 2.6% from 2.8% in January. The unemployment rate stayed at 4.1%, which is slightly higher than the Briefing consensus estimate of 4.0%, but still good enough for a 17-year low, and the average workweek ticked up to 34.5 from a revised 34.4 in January (consensus 34.4).
In short, it was another 'Goldilocks' report, pointing to strong economic growth via the impressive nonfarm payroll additions while at the same time giving the market no reason to believe that the Fed will need to be more aggressive in its path to normalization--evidenced by the deceleration in year-over-year wage growth.
U.S. Treasuries sold off in reaction to the jobs report, pushing yields back towards the multi-year highs they hit a couple of weeks ago; the benchmark 10-yr yield advanced to 2.89% after finishing Thursday at 2.87%. The uptick in yields helped underpin the financial sector (+2.5%), which finished at the top of the sector standings.
Within the financial space, Goldman Sachs (GS 270.77, +4.43) settled behind its peers following reports that its CEO Lloyd Blankfein is preparing to step down after serving at the helm for more than 12 years. Co-presidents Harvey Schwartz and David Solomon are the two front runners to replace Mr. Blankfein.
10 of 11 S&P groups finished Friday in the green, with the lightly-weighted telecom services space (-0.1%) being the lone laggard. In addition to financials, industrials (+2.2%), technology (+2.0%), materials (+1.9%), and energy (+1.9%) outperformed, while the consumer staples (+0.6%), real estate (+0.7%), and utilities (+0.3%) groups were relatively week. The energy space was helped by an increase in the price of crude oil, with West Texas Intermediate crude futures climbing 3.1% to $62.05 per barrel following a two-day skid.
News that President Trump accepted an invitation to meet with North Korean leader Kim Jong Un helped underpin Wall Street on Friday. The meeting, which will reportedly take place by the end of May, would mark the first meeting between a sitting U.S. president and a member of the Kim dynasty.
In addition, investors were still chewing on President Trump's tariff announcement on Friday, which went better than many were expecting. The president officially approved tariffs on steel and aluminum imports shortly before Thursday's closing bell, but gave Canada and Mexico an exemption and said that other countries might also receive an exemption depending on their willingness to renegotiate trade deals with the U.S.
- Nasdaq Composite: +9.5% YTD
- S&P 500: +4.2% YTD
- Dow Jones Industrial Average: +2.5% YTD
- Russell 2000: +4.0% YTD
