Nasdaq Composite Posts Biggest Weekly Gain of the Year
02 September 2017 - 7:28AM
Dow Jones News
By Riva Gold and Corrie Driebusch
The Nasdaq Composite rose to its biggest weekly gain of the
year, boosted by signs of strength in the U.S. economy and a rise
in biotechnology companies.
In the past week, investors navigated the damage caused by
Hurricane Harvey and renewed tensions between the U.S. and North
Korea, while also focusing on upbeat data on personal spending as
well as steady job creation and low unemployment. Some big
acquisition announcements and a landmark new drug approval helped
catapult major indexes higher.
On Friday, stocks edged higher following a roughly-in-line jobs
report.
The pace of hiring slowed and the U.S. unemployment rate rose
slightly last month, according to the Labor Department, but wages
ticked up less than expected. This is good for stock prices, some
analysts say, as wages are rising enough to spur more consumer
spending but not at a fast enough pace to compel the Federal
Reserve to raise interest rates.
"Thankfully, the improvement in the labor market is not leading
to too fast wage growth," said Sameer Samana, global quantitative
and technical strategist at Wells Fargo Investment Institute. "It's
right now in the sweet spot where it's enough to drive consumption,
but not enough to lead to inflation jumping up so the Fed feels it
needs to be more aggressive. It's also not affecting profit margins
yet."
In August, average hourly earnings ticked up 0.1% from the prior
month, according to the Labor Department. Economists surveyed by
The Wall Street Journal had expected earnings to rise 0.2%.
The Dow Jones Industrial Average rose 39.46 points, or 0.2%, to
21987.56 on Friday, putting its weekly gain at 0.8%. The S&P
500 added 4.90 points, or 0.2%, to 2476.55 putting its weekly gain
at 1.4%, its biggest since July. The Nasdaq Composite added 6.67
points, or 0.1%, to 6435.33.
The Nasdaq Composite finished the week up 2.7%, lifted by a 8%
rise in the Nasdaq Biotechnology Index in the period. Biotech
shares soared following the Food and Drug Administration's approval
of the first gene therapy in the U.S. on Wednesday. The group
earlier got a boost by Gilead Sciences, which on Monday agreed to
pay about $11 billion for Kite Pharma.
In other merger news, shares of United Technologies surged on
Tuesday after The Wall Street Journal reported the
aircraft-equipment maker was near a deal to buy Rockwell Collins
for more than $20 billion. United Technologies ended the week up
2.5%.
In Europe, the Stoxx Europe 600 rose 0.6% this week. On Friday,
shares of industrial goods and construction companies were among
the best performers, as data showed activity in the eurozone's
manufacturing sector increased in August to a joint 74-month
high.
Earlier, Asian shares mostly inched higher, with China gaining
slightly after a private gauge of Chinese factory activity rose for
the third straight month in August. The Shanghai Composite Index
closed 0.2% at its highest level since December 2015 as coal and
steel stocks advanced. Stocks in Shenzhen added 0.6%.
Japan's Nikkei Stock Average added 0.2% amid gains in energy
companies, ending the week 1.2% higher. The index ended a six-week
losing streak, its longest since early 2014, with its biggest
weekly gain since June.
In commodities, gasoline futures jumped 13%, its biggest
one-week percentage gain in more than five years, as Hurricane
Harvey caused U.S. refinery and pipeline shutdowns. U.S.-traded
crude oil fell 1.2% during the week to $47.29 a barrel.
Meanwhile the price of gold for September delivery jumped 2.5%
to $1324.50 an ounce during the past week following the missile
launch in North Korea, uncertainty about when the Fed may next
raise interest rates and a weaker dollar. The rise was gold's
biggest gain in more than a year.
Write to Riva Gold at riva.gold@wsj.com and Corrie Driebusch at
corrie.driebusch@wsj.com
(END) Dow Jones Newswires
September 01, 2017 17:13 ET (21:13 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.