US close: Markets rise after jobs data, but gains limited

(Sharecast News) - US stock markets finished with small gains on Friday ahead of the long weekend after a crucial jobs report raised hopes that the Federal Reserve's current rate-raising cycle is finally over. "[A] softening US jobs market suggests the Fed's work is done", according to economist James Knightley from ING Bank after economic data showed big downwards revisions to job creation over recent months and an unexpected uptick in the jobless rate.

"The US August jobs report shows modest jobs growth, benign wage pressures and a large jump in the unemployment rate as the labour market slackens. With inflation set to continue slowing, the Fed is surely not hiking interest rates in September and is unlikely to do so in November either," Knightley said.

The data was broadly met with positivity on stock markets, though gains were capped as 10-year Treasury yields rose 7.1 basis points at 4.182%.

The Dow Jones Industrial Average finished 0.3% higher at 34,838, the S&P 500 gained 0.2% to 4,516, while the Nasdaq was flat at 14,032. Wall Street is closed on Monday for Labor Day.

According to the Bureau of Labor Statistics, non-farm payrolls rose by 187,000 from July, well ahead of the 170,000 consensus forecast, but data for July was revised down to 157,000 from 187,000 initially reported and June's figures were revised to 105,000 from 185,000 initially.

The unemployment rate pushed up to 3.8% in August from 3.5% the month before, versus expectations for no change. The figures also showed that average hourly earnings rose just 0.2% on the month.

Meanwhile, the ISM manufacturing purchasing managers' index was also released, showing that the contraction in activity lessened slightly last month, with the PMI improving from 46.4 to 47.6. While a level below 50 still indicates a decline, the consensus forecast was 47.

Dell soars

Tech giant Dell surged over 21% after delivering second-quarter adjusted earnings of $1.74 per share, up just 4% year-on-year but well ahead of the $1.14 expected by analysts. Management also gave stronger-than-expected guidance for the current quarter and full year.

Workout gear group Lululemon was also in demand, rising 6% after impressing with its quarterly results, raising its forecasts after a strong performance in China.

Eos Energy Enterprises was a big mover, jumping 18% after the energy storage company received a loan commitment of nearly $400m from the Department of Energy.