Non-farm payrolls for December rose by 148,000; the market had expected 190,000 additions
Dow Jones closes at a new high for the third day in succession
S&P 500 closes at a new high for the fourth day in succession
If every week is as good as the first of 2018 for equities, the Dow Jones will be through the 30,000 barrier in no time.
The Dow Jones average finished Friday at 25,295.87, up 221 points on the day, hitting a new high for the third day in succession.
The S&P 500, meanwhile, hit its fourth consecutive record closing value, rising 19 points to 2,743.
Across the border, Canadian bulls looked on enviously as the S&P TSX Composite shed 64 points to close at 16,349.
The Dow's rise meant it has risen 2.3% so far this year while the S&P 500 is up 2.6%.
The gains were achieved despite a disappointing November jobs report and a widening of the US trade deficit by 3.2% to US$50.5bn; analysts had expected a deficit of US$50bn.
Some commentators argued that the underwhelming jobs report - non-farm payrolls rose by 148,000 in November after rising by 252,000 in October - was, in fact, a bonus for equity markets as it dampens down the prospect of an interest rate hike.
Average hourly earnings increased 0.3% month-on-month in December and 2.5% year-on-year, which German bank Berenberg said was "disappointing in light of the low unemployment rate and anecdotal evidence of tight labor markets".
The bank expects average wage gains to accelerate in 2018.
Mid-session: Dow Jones eyeing a triple-digit rise
The Dow Jones index was pressing on towards a triple-digit gain, shrugging off any disappointment from November's jobs report.
The Dow Jones was up 95 at 25,170 while the broader-based S&P 500 was 9.4 points higher at 2,733.
“Non-farm payrolls came in a bit softer than expected for December, with employers adding 148,000 jobs over the month,2 noted Wells Fargo Securities.
“Over the past three months, job gains averaged 203,700, which looks consistent with the 2.5-3.0 percent growth we expect to see in the first half of 2018. We continue to expect the FOMC to raise the fed funds rate again in March,” the bank added.
“The weaker out-turn in December can be traced to the service sector. Notably, retail employment fell by 20,000 jobs in December as the industry continues to adjust to changing buying patterns both on a seasonal and long-term basis. Hiring also slowed in transportation & warehousing, professional & business services and education & health relative to November. Hiring in the goods-producing sector held up better, rising by 55,000 amid solid gains in construction and manufacturing,” Wells Fargo observed.
On the New York Stock Exchange Diplomat Pharmacy Inc (NYSE:DPLO) was one of the tip risers, advancing 10.6% after reaffirming guidance for full-year 2017 and providing some preliminary guidance for 2018, with underlying earnings (EBITDA) expected to be two-thirds higher than in 2017.
Open: Off to a solid start despite non-farm payrolls coming in below expectations
US stocks got off to a solid start despite disappointing November jobs numbers.
The Dow Jones industrial average was up 58 at 25,133 while the broader-based S&P 500 was 7.6 points firmer at 2,732.
The bears had their teeth into bookshops operator Barnes & Noble Inc (NYSE:BKS), after it disappointed the market with its like-for-like (LFL) sales numbers for the final nine weeks of 2017.
The stock was down 14% as the market digested some bleak numbers; sales in the period were down 6.4% from a year earlier to US$953mln, as were LFL sales, while online sales fell 4.5% year-on-year.
December was a poor month for the retailer, and full-year LFL sales guidance advised the market to brace for more declines.
Pre-open
US non-farm payrolls rose by 148,000 in December, which was way below expectations of a rise of 190,000.
The disappointing rise follows a revised 252,000 increase in November.
The unemployment rate held at 4.1%.
“The minor bump in the road for Payroll figures … won’t cause concern for Janet Yellen as Trump’s bullish projections for growth attempt to take the limelight away from his personal life in the White House,” suggested Alex Lydall, head of dealing at forex trading platform operator Foenix Partners.
Dennis de Jong at UFX.com works a similar theme.
“Businesses and consumers are feeling confident to invest and spend respectively, which is likely to lead to many more hires in the next couple of months.
“It is understandable that the figures have dropped slightly, as the gains in October and November were tied into a number of states recovering from the severe hurricanes.
“The general outlook remains positive and I’m sure President Trump will be feeling typically bullish as he prepares to celebrate his anniversary,” de Jong suggested.
The numbers do not seem to have quashed expectations of a firm start on Wall Street, with spread betting quotes pointing to the Dow Jones opening at around 25,165, up 90 points.
The S&P 500 is seen opening its account at around 3,732.7, after the index rose 11 points to 2,724 yesterday.
Pre-market activity
Booze maker Constellation Brands Inc (NYSE:STZ) left a sour taste in the mouth of investors with its third quarter numbers.
The stock was down 2.1% at US$221 in pre-market trading as the company said sales of wines and spirits over the full-year will be at the lower end of the guidance range.
Wine and spirits sales fell 10.3% in the third quarter, overshadowing an 8% increase in the sales of the group's beers, which include Corona.
Online retail monster Amazon.com Inc (NASDAQ:AMZN) edged up 0.5% to US$1,215.25 in pre-market trading as reports emerged that it is in talks with the Premier League in England to bid for the right to stream live football matches .
UK broadsheet the Daily Telegraph reported: “In a move that will fuel speculation the internet giant is considering challenging Sky and BT for domestic coverage of the world’s richest league, Amazon has been consulting industry experts about the practicalities of adding top-flight English football to its fledgling portfolio of live sport.”
Also edging higher was consumer electronics behemoth Apple Inc (NASDAQ:AAPL), which has revealed it is to issue a software patch for all of its devices after security researchers disclosed two major vulnerabilities in almost all of the chips used in Apple's devices over the last decade.