Wall Street closed out a week of mostly choppy trading with broad gains Friday, pushing the S&P 500 to its second straight weekly gain.
The S&P 500 rose 0.9% and finished with a 0.6% gain for the week. Technology stocks were biggest gainers and did the most to drive the broader market higher. Microsoft rose 2.1% and Apple added 1.9%. Communication stocks and companies that rely on consumer spending also made solid gains. Only utilities closed lower.
The rally followed a Labor Department report showing U.S. employers added 559,000 jobs in May. That’s an improvement from April’s sluggish gain, but short of economists’ forecasts, possibly encouraging the Federal Reserve to continue measures such as monthly bond purchases to keep interest rates low.
“When you see employment numbers like we saw today, which were slightly disappointing, that would give market participants confidence that the Fed will stay on track and keep rates lower for a longer period of time,” said Clinton Warren, global investment specialist at J.P. Morgan Private Bank. “The market is saying ‘OK, the Fed is going to keep rates lower, that’s good for the stock market, it’s good for risk asset classes, and that’s what’s driving the market higher today.”
The Dow Jones Industrial Average gained 0.5%, while the rally in technology stocks helped push the Nasdaq to a solid 1.5% gain. The Russell 2000 index of smaller caps added 0.3%.
Investors have been worried about rising inflation becoming a long-term issue, rather than the temporary effect from the recovering economy. They are also worried that The Fed could consider pulling its support for the economy if inflation runs too hot.