U.S. stocks rallied to new highs as a decent jobs number offset a weaker than expected ISM Non Manufacturing report. The employment report was not fantastic but since expectations had been lowered in recent weeks with the weakening economic data, it was viewed as positive versus expectations. A few of the warts under the surface such as a drop in the hours worked were dismissed. The S&P 500 gained 1.05% and the NASDAQ 1.1%.
- Nonfarm payrolls rose by 165,000 last month and the jobless rate ticked down to 7.5%, the lowest level since December 2008. The Labor Department also significantly raised hiring estimates for the two prior months, by a combined 114,000 jobs. Expectations were for an increase of 140,000.
- The increase in 176,000 private-sector jobs, on top of a loss of 11,000 government jobs, was concentrated in a handful of service industries. The professional and business-services sectors added 73,000 jobs, including 31,000 temporary workers. Manufacturing employment stalled and construction employment contracted after gains earlier in the year.
- The labor force participation rate was flat at 63.6%. That's the lowest labor force participation rate since May 1979.
- A broader measure of underemployment ticked up to 13.9% in April, accounting for discouraged job seekers who quit looking for work and part-timers who want full-time work.
In other reports:
- Factory orders fell 0.4% in March, according to the Census Bureau. The report was worse than expected and came after a 1.9% drop in February.
- The Institute for Supply Management's service-sector gauge released Friday fell to 53.1 in April, down 1.3 points from March and its lowest reading since last July. The reading above 50 still indicates an improvement for the nonmanufacturing sector, but at a slower pace.
Crude oil gained 1.7% to $95.61, gold fell 0.2% to $1464.20, and silver added 0.8% to $24.01.
British stocks gained 0.9%, German stocks 2% and French stocks 1.4%.
The Shanghai Composite added 1.4% while Japan's Nikkei was closed for a holiday.