Stocks Open Higher After Jobs Report

By Matt Jarzemsky and Tomi Kilgore 

        U.S. stocks moved higher Friday, putting a fresh record high within reach for the Dow industrials, after April job-growth data trounced expectations.
        The Dow Jones Industrial Average added 22 points, or 0.1%, to 16581 in the moments after the opening bell. On Wednesday, the Dow closed at a record 16581, topping a previous high set on Dec. 31.
        The S&P 500 index added three points, or 0.2%, to 1887. The Nasdaq Composite Index added 13 points, or 0.3%, to 4140.
        Treasury bonds and gold fell, and the dollar gained, as traders saw the report giving a green light to the U.S. Federal Reserve to continue withdrawing its economic stimulus. Oil futures climbed on the news.
        With major benchmarks near record highs, stocks have stalled this year as corporate profit growth has slowed and valuations have risen above long-term averages. Fund managers say they're putting renewed emphasis on picking individual stocks to drive returns, rather than making the type of broad-based bets that fueled the S&P 500's 30% advance in 2013.
        The U.S. added 288,000 jobs in April, the Commerce Department reported, the fastest pace in more than two years and well above economists' median forecast of 215,000. April's unemployment rate fell to 6.3% from 6.7% a month earlier, but the numbers also showed that many people were dropping out of the work force, a concern for the Fed.
        "It was a very strong report," said Marc Doss, regional chief investment officer at Wells Fargo Private Bank, which oversees about $170 billion. "But the markets are going to want to see more, probably, to move higher. Investors will want to see a good quarter of earnings. This quarter's not that great."
        Nevertheless, Mr. Doss has favored U.S. stocks when putting new client money to work, based on his expectations the economy will pick up and fuel better corporate profits later this year, he said.
        The latest quarter's earnings, while muted, have topped forecasts. With 73% of S&P 500 companies having reported first-quarter results, overall earnings per share are now seen rising 1.6% from year-ago levels, according to FactSet, versus expectations of a 1.2% decline at the end of March. Revenue is seen growing 2.8% from last year, according to FactSet.
        The jobs report pushed the yield on the 10-year Treasury note sharply higher to 2.683%, after settling near a two-month low of 2.606% late Thursday.
        Gary Pollack, who helps oversee $12 billion as head of fixed-income trading in New York at Deutsche Bank AG's private wealth management unit, said he expected the 10-year yield to rise to 2.8% to 2.85% in the next month, but he said for the yield to rise to 3%, "we need more strong data."
        He noted that the report Friday still showed slack in the labor market with little inflation pressure, a sign the Fed wasn't likely to accelerate the pace at which it is withdrawing monetary stimulus, keeping a lid on the pace of bond yields' rise.
        The dollar rose and gold fell. Traders expect the Fed's cutbacks in its monthly bond purchases to boost interest rates, bolstering the dollar and curbing inflation. Many investors had seen gold as a hedge against inflation they feared would be spurred by the stimulus program.
        The dollar rose by 0.6% against the yen, to Yen102.91, from Yen102.50 prior to the number's release. Meanwhile, the euro fell 0.4% versus the dollar, trading at $1.3824, from $1.3861 before the data.
        Gold prices fell Friday, giving up earlier gains. The most actively traded contract, for June delivery, was recently down $4, or 0.3%, at $1,279.40 a troy ounce on the Comex division of the New York Mercantile Exchange.
        "This is the first time you're seeing something better than expected come out in a while," said Thomas Capalbo, a broker with Newedge, a futures brokerage in New York. "This might be the push that you need to send gold down to $1,250 and force it to test new lows next month."
        Oil prices gained on the jobs report. Nymex Crude prices recently traded up 38 cents, or 0.4%, at $99.80 a barrel. After record stockpiles pushed prices to five-week lows Thursday, the price bounced back on the idea that more workers driving around would consume more oil.
        European markets eased slightly, as an escalation in tension between Ukraine and Russia was partially offset by upbeat manufacturing data. The Stoxx Europe 600 inched down 0.1%.
        Ukraine launched a military operation Friday to regain control of the pro-Russian rebel stronghold of Slovyansk. Russia's MICEX index lost 0.2%.
        Asian markets were mixed, with Japan's Nikkei Stock Average slipping 0.2% and Hong Kong's Hang Seng Index rising 0.6%. Mainland Chinese stock markets were closed for a holiday.
        Among early stock movers, LinkedIn fell 2% in premarket trading after the professional social network reported late Thursday first-quarter adjusted earnings and revenue that topped analyst estimates, but provided a downbeat sales outlook for the current quarter and full year.
        The U.S.-listed shares of the U.K.'s AstraZeneca eased 0.2% after the drug maker rejected an improved buyout offer from Dow component Pfizer worth more than $106 billion. Pfizer's stock edged down 0.5%.
        Berkshire Hathaway tacked on 0.5% after the company announced a deal to buy Canadian electricity transmission provider AltaLink, a unit of SNC-Lavalin, for about $3.52 billion.
        In other corporate news, Wynn Resorts rallied 3.1% after the casino operator exceeded first-quarter earnings and revenue estimates, boosted by increases in occupancy, daily rates and operating margins.
        Immunomedics tumbled 16% after announcing late Thursday a public offering of shares of its common stock.
        Akamai Technologies ran up 2.7% after first-quarter adjusted earnings and revenue beat analyst estimates, helped by traffic acceleration in its media-delivery business.
        Write to Matt Jarzemsky at matthew.jarzemsky@wsj.com and Tomi Kilgore at tomi.kilgore@wsj.com
        (END) Dow Jones Newswires

        May 02, 2014 09:47 ET (13:47 GMT)