S&P 500 ends at record

September 6, 2014
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NEW YORK: US stocks ended higher on Friday, lifting the S&P 500 to a fresh closing high, after a weaker-than-expected jobs report was taken as a sign that the Federal Reserve will not begin raising interest rates anytime soon.

Stocks had traded lower after the government reported fewer US jobs were created in August than expected.

By early afternoon, however, major indexes turned positive, led by utilities. Fed officials have made it clear that they see the labor market as still struggling, which partially justifies keeping rates at rock-bottom levels.

“The nonfarm payroll numbers fell well short of expectations, but the market reaction suggests a stronger-than-consensus number might have been met with a downward bias in equities,” said Jim Russell, senior equity strategist at US Bank Wealth Management in Cincinnati.

“What we saw today called off the dogs to some degree and took the heat down a notch or two from investors’ concern about rate hikes.”

Utilities gained 1.2 per cent as investors turned to the group for their income appeal with bond yields falling in response to the payrolls data. Utility shares often benefit as bond yields fall because the companies pay relatively rich dividends.

Power generator NRG Energy Inc rose 1.9 per cent to US$30.89, and XCEL Energy Inc advanced 1.9 per cent to US$32.48.

The Dow Jones industrial average rose 67.78 points, or 0.4 per cent, to 17,137.36. The S&P 500 was up 10.06 points, or 0.5 per cent, to 2,007.71. The Nasdaq Composite added 20.61 points, or 0.45 per cent, to 4,582.90.

For the week, the Dow and the S&P each gained 0.2 per cent and the Nasdaq rose 0.06 per cent.

Family Dollar Stores Inc shares lost 1.2 per cent to US$79.11 after the discount retailer rejected Dollar General Corp’s sweetened takeover bid. Shares of Dollar General fell 2.3 per cent to US$63.01.

Apple shares edged up 0.9 per cent to US$98.97 after the company said it planned to add new security features to its iCloud service.

Retailers lost ground. Michael Kors shares lost 4.5 per cent to US$76.39 after the company announced a secondary offering of 11.6 million shares. Gap Inc shares fell 4.2 per cent to US$44.65 after worse-than-expected same-store-sales in August.

About 5.2 billion shares traded on all US platforms, according to BATS exchange data, compared with the five-day average of 5.1 billion.– Reuters

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