Stocks Jump as Jobless Rate Signals Growth and Stimulus
NEW YORK (TheStreet) -- U.S. stocks gained Friday after a mixed labor market report bolstered the outlook for the Federal Reserve's bond-buying stimulus program, and the notion that the world's largest economy is gradually recovering.
The S&P 500 gained 1.3% to close at 1,643.38.
The U.S. workforce added 175,000 jobs in May, the Labor Department said Friday, an addition that had little impact on the national unemployment rate, which rose to 7.6%, or 11.8 million people officially without a job. The total number of employed rose last month by 420,000, adding to a national workforce of 155.7 million.
The jobs report stoked bullish sentiment on both sides of a debate that has pitted those who argue that the economy is improving and would be better off relying less on the Fed's aggressive accommodative measures versus those who counter that the central bank's support is essential to maintain the recovery."While today's employment report wasn't blockbuster, it corroborated the moderately improving economic environment in which the Fed is likely to scale back its asset purchases sooner rather than later," said Dan Greenhaus, chief global strategist at BTIG in New York. "Positive economic data points suggest the economy may not have been as weak as some speculated, and that's good for stock prices." David Ader, head of U.S. government-bond strategy at CRT Capital in Stamford, Conn., took an alternate view, writing in a note that "from a market perspective this [the job report] does not enhance prospects for a tapering earlier than has been expected, i.e. Sep/Oct." GameStop ( GME), the world's largest video-game retailer, was the highest gaining stock in the S&P 500 for the day, jumped 6.15% to $36.75 after Microsoft ( MSFT) clarified its trade-in and resell policies for Xbox One games. Power generator NRG Energy ( NRG) added 5.42% to $27.04 after saying its subsidiary NRG Yield had filed for an initial public offering of the unit's class A common shares. NRG is expected to retain a majority voting interest in NRG Yield after the offering. Iron Mountain (IRM) tumbled 15.61% to $29.03 after the Internal Revenue Service began to scrutinize the data back-up and record management company's eligibility for real estate investment trust status. The Dow Jones Industrial Average added 1.4% to 15,248.12 while the Nasdaq advanced 1.3% to 3,469.22. Follow @atwtse Written by Andrea Tse in New York >To contact the writer of this article, click here: Andrea Tse.
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV