New York – Wall Street barreled higher today after the Labor Department’s report of modest April job growth bolstered hopes that the Federal Reserve will soon stop hiking interest rates. The Dow Jones industrials climbed 138 points to a fresh six-year high, and all three major indexes finished the week with gains.
Investors saw a slowdown in April employment growth as the latest sign of a softening economy, a reason for the Fed to stop raising interest rates. That countered worries over rising wages, which followed an upswing in employers’ labor costs on Thursday.
Jack Caffrey, equities strategist for JPMorgan Private Bank, said the market appeared to be focusing on recent positive data instead of considering the long-term consequences of why the Fed would stop boosting rates – because economic growth has slowed enough to contain inflation.
“People are taking the weaker job creation, the stability in the unemployment rate and the uptick in jobless claims and spinning that into a hope the Fed will move to the sideline sooner than later,” Caffrey said. “It’s almost a hope-for-relief rally instead of a ‘the Fed is done, things are slowing down’ mentality.” Falling oil prices also helped stocks to their gains, although some believe higher gasoline prices will pressure consumer spending and keep the economy from overheating.
According to preliminary calculations, the Dow rose 138.88, or 1.21 percent, to 11,577.74, its best showing since the Dow reached its all-time high of 11,722.98 on Jan. 14, 2000.
Broader stock indicators were higher. The Standard & Poor’s 500 index gained 13.51, or 1.03 percent, to 1,325.76, its highest level since Feb. 15, 2001; the Nasdaq composite index advanced 18.67, or 0.8 percent, to 2,342.57.
