A mostly positive jobs report for July kept markets buoyant on Friday, Aug. 4, and fueled a full week of record closes for the Dow Jones Industrial Average.
The Dow rose 0.28%, securing a new all-time closing high of 22,085. That marked the blue-chip index's eighth straight record and ninth day in the green. The S&P 500 rose 0.1%, and the Nasdaq gained 0.18%.
The U.S. economy added more jobs than anticipated in July. Nonfarm payrolls rose by 209,000 last month, according to the Labor Department, above consensus of 180,000. The June jobs number was revised to 231,000 from 222,000, though the May figure was cut to 145,000 from 152,000.
The unemployment rate decreased by 10 basis points to 4.3%, as expected, matching the 16-year low reached in May. Average hourly earnings increased 0.3% month over month, in-line with estimates, and were up 2.5% over the past 12 months.
"This should keep the chances of a December rate rise alive," Aberdeen Asset Management Investment Strategist Luke Bartholomew said in a note. "The next rate rise really boils down to whether inflation picks up, and this requires stronger wage growth. While far from spectacular, especially given the further fall in unemployment, today's wage numbers are just about enough for now."
The Fed left the short-term interest rates at 1% to 1.25% at its meeting in July. Another rate hike isn't expected until at least December. Chances of a year-end increase are at 47%, according to CME Group futures trading. Chances had been 42% following the Fed's meeting on July 26.
The basic materials sector was the best performer in markets Friday. United States Steel Corp. (X) , Vale SA (VALE) , Dow Chemical Co. (DOW) , and CF Industries Holdings Inc. (CF) were each higher, while the Materials Select Sector SPDR ETF (XLB) added 0.5%.
In earnings, GoPro Inc. (GPRO) issued an upbeat outlook for its third quarter and bested second-quarter estimates. The action-camera maker expects a net loss of 6 cents to a profit of 5 cents a share over its third quarter, better than an anticipated loss of 12 cents a share. Third-quarter revenue estimates of $290 million to $310 million also came in above a $278.5 million consensus.
Weight Watchers International Inc. (WTW) rocketed 24% higher after posting growth in earnings and revenue over its second quarter. The weight loss company earned 67 cents a share, higher than 46 cents a share in the year-ago quarter, while revenue increased 10% to $341.7 million. Analysts anticipated earnings of 51 cents a share on $334 million in revenue.
Shake Shack Inc. (SHAK) projected a weaker 2017 than anticipated. The burger chain estimates full-year sales no higher than $355 million, below an expected $356.7 million. Shake Shack said full-year same-store sales may contract by 2% to 3%, surprising analysts looking for a 0.3% increase.
Yelp Inc. (YELP) rocketed 26% higher after a better-than-expected quarter and selling its Eat24 delivery service to GrubHub Inc. (GRUB) for $287.5 million, roughly double the price it paid around two years ago. The online-ratings business also reported second-quarter net income of 9 cents a share, higher than one cent a share a year earlier. Analysts anticipated earnings of 8 cents a share. Revenue of $208.9 million exceeded estimates of $205 million.
Kraft Heinz Co. (KHC) reported a mixed quarter in which it beat on the bottom-line but missed on the top. Net income rose to 94 cents a share from 63 cents in the year-ago quarter. Adjusted earnings of 98 cents a share exceeded estimates of 85 cents. Revenue of $6.68 billion missed consensus of $6.73 billion. The company's board bumped up its quarterly dividend to 62.5 cents a share, up from 60 cents.
Cigna Corp. (CI) declined slightly after topping earnings and revenue estimates over its second quarter. Net income of $3.15 a share rose from $1.97 a year earlier. Adjusted profit of $2.91 a share exceeded analysts' target of $2.48. Revenue of $10.32 billion came in higher than $9.02 billion consensus. For the full year, Cigna anticipates adjusted earnings of $9.75 to $10.05 a share and 3% to 4% sales growth.
Crude oil prices held higher after a decline in the number of active oil rigs in the U.S. Active oil-drilling rigs fell by one in the past week to 765, according to Baker Hughes data.
West Texas Intermediate rose 0.8% to $49.41 a barrel on Friday.
The U.S. trade deficit decreased by 5.9% in June to $43.6 billion. Exports increased 1.2% to $194.4 billion, while imports slipped by 0.2% to $238 billion.
The world's second-largest carmaker also posted better-than-expected first-quarter earnings on Friday and raised its fiscal full-year outlook for profit and revenue. Net profit in the first quarter rose 11% as global sales jumped in the period. Toyota said it sold 2.2 million vehicles during the quarter, an improvement of 42,000 from a year earlier.
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