US stocks extend record highs as investors digest surprisingly strong June jobs report

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  • The S&P 500 on Friday heads toward a new record high after a robust June jobs report.
  • Blue-chip and tech stocks also rose after US data showed the creation of 850,000 jobs last month.
  • Stock trading will be closed Monday for Independence Day.
  • See more stories on Insider’s business page.

US stocks jumped higher Friday, aiming for a seventh straight day of record highs after the June jobs report indicated accelerating growth in the labor market of the world’s largest economy which as it recovers from the coronavirus pandemic.

All three of Wall Street’s main benchmark indexes advanced, with the S&P 500 up after logging its sixth consecutive record-high close on Thursday.

Ahead of the opening bell, the Labor Department reported the addition of 850,000 jobs to nonfarm payrolls last month. Economists had expected growth of 703,000 jobs, according to an Econoday estimate.

Here’s where US indexes stood at 9:30 a.m. on Friday:

The report showed a pickup in hiring in the leisure and hospitality industry, among others. That sector has been hit hard by the COVID-19 pandemic as bars, restaurants, and air travel were temporarily shut down to curb the spread of the virus. The data arrived before investors take a break on Monday as stock trading will be closed in observance of Independence Day.

“We got some early fireworks in the jobs report as the numbers blew past expectations,” said Chris Zaccarelli, chief investment officer for Independent Advisor Alliance, in a note Friday.

“In the current environment, we remain positive of cyclical sectors such as financials and industrials, but we are complementing that with higher quality, large tech companies which will act defensively in the event that growth slows down in the next couple years after the initial post-pandemic boost.”

Around the markets, Virgin Galactic Holdings shares jumped at least 31% early Friday after founder Richard Branson said he will travel on the spaceflight company’s test flight on July 11, days before Jeff Bezos’ planned trip to space.

Gold rose 0.4% to $1,784.28 per ounce. Long-dated US Treasury yields fell, with the 10-year yield at 1.434%.

Oil prices fell. West Texas Intermediate crude lost 0.6%, to $74.75 per barrel as OPEC and its allies meet for a second day to discuss output levels. Brent crude, oil’s international benchmark, lost 0.7% to $75.34 per barrel .

Bitcoin fell 1.3%, to $33,008.45.

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US stocks head for 7th day of record highs, while oil tops $75 for the first time since 2018

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US stocks were set to log their seventh day of record highs on Friday as investors looked forward to a major indicator of recovery, the Labor Department’s June jobs report.

Futures on the Dow Jones, S&P 500, and Nasdaq rose 0.2%, suggesting a higher start to trading later on.

Deutsche Bank’s US economists expect monthly non-farm payroll data, due later on Friday, to show a 700,000 gain for the month, which should help cut the unemployment rate to a post-pandemic low of 5.7%.

Weekly jobless claims data on Thursday showed the number of Americans filing for unemployment insurance sank to a post-pandemic low of 364,000, versus 388,000 expected, for the week through June 26.

Markets got the second half of the year off to a strong start on Thursday, with risk assets resuming their upward march, Deutsche Bank research strategist Jim Reid said. “Indeed, the mood was pretty buoyant across multiple asset classes,” he added.

The VIX index, which measures the market’s expectations of volatility in the coming 30 days, fell -0.4 points to 15.41 to reach its lowest level since the pandemic began.

While volatility is subdued, the potential catalysts that could cause it to flare up again include inflation concerns, persistent COVID-19 worries, and ongoing geopolitical tensions, according to UBS.

“Although we believe a risk-on stance is still warranted, we think investors can use this period of low volatility to ensure their portfolios are prepared for any turbulence ahead,” Mark Haefele, chief investment officer at UBS Global Wealth Management, said.

Elsewhere in Europe, the UK reported more than 27,000 new COVID-19 cases on Thursday – its highest level since the end of January. But equities followed Wall Street in tracking the closely-watched US jobs report.

London’s FTSE 100 rose 0.4% and Frankfurt’s DAX rose 0.5%. The pan-European Euro Stoxx 600 rose 0.5%, with travel and leisure stocks climbing 1.2% to lead gains.

West Texas Intermediate crude oil prices traded above $75 a barrel for a second day on Friday, a near three-year high, ahead of a key OPEC decision on production policy for the second half of the year. But a standoff between the UAE and other key exporters could mean the group may not increase production at all, Bloomberg reported, citing a source. Brent crude was meanwhile trading slightly lower on the day at $75.71 a barrel.

Asian markets fell a day after Xi Jinping marked the centennial of the Chinese Communist party’s founding with a nationalistic address in Beijing. It seems likely that his hawkish comments on geopolitics are continuing to weigh on the region’s markets, Deutsche’s Reid said.

The Shanghai Composite fell 1.95%, Hong Kong’s Hang Seng fell 1.9%, while Tokyo’s Nikkei rose 0.2%.

Read More: Bank of America names 5 semiconductor stocks to buy for the second half of 2021 – and breaks down why each has ‘catch-up potential’ after lagging since January

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