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Dow and S&P 500 End at Records as U.S. Payrolls Growth Tops Forecasts

The Dow and S&P 500 close at records following a better-than-expected U.S. jobs report for July.

The Dow Jones Industrial Average and the S&P 500 closed at records Friday following a better-than-expected U.S. jobs report that pointed to a labor-market recovery as economic activity rebounds.

The Dow finished up 144 points, or 0.41%, to 35,208 and the S&P 500 rose 0.17%. 

The tech-heavy Nasdaq finished down 0.4%. Key stocks dragging down the Nasdaq included Peloton  (PTON) - Get Free Report, off 6.3%, and Okta  (OKTA) - Get Free Report, off 4.8%.  

The yield on the benchmark 10-year Treasury climbed Friday to 1.304%.

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The U.S. economy added nearly 1 million jobs in July, the Labor Department said Friday. Government hiring boosted the headline total and private-sector gains defied the recent surge in delta-variant infections.

The Bureau for Labor Statistics said 943,000 new jobs were created last month, with the unemployment rate falling to a pandemic low of 5.4% from 5.9% in June. Economists had forecast a jobs gain of about 862,000 for July.

The jobs numbers for June also were revised higher, with the Labor Department saying 938,000 jobs were added in June, up from its initial estimate of 850,000.

The robust jobs gains could increase bets on the Federal Reserve's tapering bond purchases sooner rather than later. 

Fed Chairman Jerome Powell repeatedly has said, however, that a recovery in the labor market still has a ways to go and the central bank, therefore, won't be pulling back on support anytime soon.

"What’s been interesting is the market hasn’t particularly been swayed by jobs data either positive or negative. Instead it seems it’s choosing to get the facts straight from the source -- which is the Fed," said Mike Loewengart, managing director of investment strategy at E-Trade.

"And the Fed has been clear that it will remain patient even in the face of strong data like we’re seeing (Friday). And remember this report captures the employment picture before the delta variant truly began to refuel mask mandates and stalling of reopenings. So while this is a knockout report, keep in mind there are still challenges ahead," he added.

Solid earnings, meanwhile, have continued to lift markets this week.

DraftKings  (DKNG) - Get Free Report shares ended 2.2% higher on Friday after the company reported a narrower-than-expected second-quarter loss and raised its guidance for the remainder of the year amid a rebound in online sports betting.

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