Wall Street largely overlooked weaker-than-expected May jobs growth on Friday, with major benchmark indexes closing at records for their second day in a row.
The S&P 500 was up 0.35%, the Dow Jones Industrial Average gained 0.25%, and the Nasdaq rose 0.94%.
The nonfarm payrolls report from the U.S. Labor Department showed 135,000 jobs were added to the U.S. economy in May, compared with economists' expectations of 178,000. Both April and March figures were reduced: April's was cut to 174,000 from 211,000, while March was revised to 50,000 from 79,000.
The unemployment rate fell by 10 basis points to 4.3%, according to FactSet estimates, touching its lowest since 2001 and surprising analysts who had expected the figure to be flat. Average hourly wages increased 0.2% to $26.22, in line with estimates.
"Today's jobs number is disappointing, but the overall trend is still very positive, and the unemployment rate continues to decline," said Tony Bedikian, head of global markets at Citizens Bank. "The U.S. economy is showing other signs of strength as well and the market is still forecasting that the Fed will raise rates later this month."
The chances of a 25-basis-point increase to the federal funds rate when the central bank's monetary policy committee meets in June held at 90%, according to CME Group fed funds futures.
Still, the jobs report doesn't support current market optimism and could give sellers some ammo, James "Rev Shark" Deporre argues on our premium site for investors, Real Money. Get his insights with a free trial subscription.
In other economic indicators, the U.S. trade deficit widened by 5.2% to $47.6 billion in April, according to the Census Bureau. Exports fell by 0.3%, while imports increased 0.8%.
Global crude prices fell sharply Friday amid concern that President Donald Trump's decision to leave the Paris Accord on climate change could spark increased drilling and production rates from American oil companies. Trump pledged to quit the nearly-200 nation agreement on the campaign trail, but hope surged after his election that he might change his mind. Prices have already been under pressure in recent days due to worries about a global supply imbalance.
Prices held lower after a weekly report on the number of active rigs drilling for oil in the U.S. rose for another week. The number of active rigs drilling for oil increased by 11 to 733 in the past week, according to Baker Hughes. West Texas Intermediate crude dropped 1.1% to $47.82 a barrel.
Energy companies were the worst performers on Friday. Major oil companies Exxon Mobil (XOM) - Get Report , Royal Dutch Shell (RDS.A) , BP (BP) - Get Report and Schlumberger (SLB) - Get Report were lower, while the Energy Select Sector SPDR (ETF) (XLE) - Get Report declined 1.2%.
Lululemon (LULU) - Get Report rocketed 12% higher after reporting a positive quarter and announcing restructuring plans. The athletic apparel brand earned an adjusted 33 cents a share, 3 cents higher than a year earlier and a nickel above expectations. Sales also exceeded estimates. Lululemon also announced that it would close about 40 of its 55 Ivivva-branded stores and fold the remainder into the larger brand's locations.
Restoration Hardware (RH) - Get Report plummeted 26% after trimming its full-year earnings outlook. The furniture retailer reduced its fiscal-year profit guidance to $1.67 to $1.94 a share, down from its previous range of $1.78 to $2.19 a share. CEO Gary Friedman said management was taking a "cautiously optimistic approach" because of an uncertain business environment.
Broadcom (AVGO) - Get Report increased 8.5% after swinging to a profit over its fiscal second quarter. The chipmaker earned an adjusted $3.69 a share, 3 cents above estimates. Sales also exceeded analysts' targets.
Buffalo Wild Wings (BWLD) increased 1.7% after CEO Sally Smith announced she would retire by the end of the year. Smith also withdrew herself from consideration for the board.
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