U.S. Stocks Set Record, Dollar Gains on Jobs Data

EghtesadOnline: Fresh signs of strength in the U.S. labor market reignited the dollar rally and sent U.S. stocks to all-time highs, with the Dow Jones Industrial Average climbing within one point of 20,000. Treasuries tumbled with gold as data bolstered the case for higher interest rates.

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07 January 2017

The S&P 500 Index closed at a record for the first time since Dec. 13. The Dow finished 33 points from the round-number milestone to cap its best week in a month. The Bloomberg Dollar Spot Index halted a two-day slide, rising toward a 14-year high. The yield on the 10-year Treasury note jumped after falling nine basis points Thursday. Oil slipped and gold retreated from a four-week high.

Evidence of a healthy U.S. labor market helped the dollar recoup some losses as investors speculated growth in the world’s largest economy is poised to accelerate. Equities broke above a monthlong range after a post-election rally stalled when the Fed raised rates and doubts arose that Donald Trump will usher in an era of higher government spending, Bloomberg reported.

Mohamed El-Erian said in a Bloomberg TV interview that the jobs report will encourage the Fed to proceed with raising interest rates, though he cautioned that a strong dollar could weigh on growth.

Stocks

The S&P 500 rose 0.5 percent a record 2,279.28 at 4 p.m. in New York. It added 1.7 percent in the week, the most since Dec. 9.

The Nasdaq Composite and Nasdaq 100 indexes advanced at least 0.6 percent, with both closing at all-time highs.

The Dow climbed to 19,965.50, about 10 points below its record close. It set an intraday high of 19,999.63, and capped a weekly gain of 1 percent.

The MSCI All-Country World Index slipped 0.1 percent to pare a weekly gain to 1.7 percent.

The Stoxx Europe 600 Index fell 0.1 percent, trimming a weekly advance, as commodity producers declined.

Currencies

The Bloomberg Dollar Spot Index rose 0.6 percent after falling 1 percent Thursday. It is little changed for the week.

The offshore yuan fell 0.6 percent to 6.8304 per dollar after a four-day climb.

The euro dropped 0.7 percent to $1.0534 and the pound retreated 1.1 percent to $1.2288.

Canada’s dollar was little changed at C$1.3263 against its U.S. counterpart after the country posted its first trade surplus in more than two years and full-time jobs surged.

Turkey’s lira was down 1.4 percent after touching a record low Thursday.

Commodities

Crude was little changed at $53.74 a barrel in New York. U.S. government data showed strong job and wage gains while Kuwait and Saudi Arabia signaled they are curbing output.

Gold futures fell 0.8 percent to $1,172.50 an ounce.

Copper slipped 0.6 percent and natural gas futures slid 0.7 percent.

Bonds

The biggest rally in U.S. Treasuries since June 27 was brought up short, with the yield on the 10-year benchmark up rising back above 2.40 percent after sliding nine basis points Thursday.

The two-year yield jumped five basis points to 1.21 percent.