FILE - This Monday, Aug. 24, 2015, file photo shows the New York Stock Exchange. U.S. stocks are mixed, Tuesday, Jan. 23, 2018, as technology and consumer-focused companies rise but consumer goods makers like Johnson & Johnson take losses. (AP Photo/Seth Wenig, File)

Yields sink to 2017 low, stocks hug close to record levels

June 02, 2017 - 9:56 am

NEW YORK (AP) — Bond yields touched their lowest level of the year and the dollar's value dipped against other currencies Friday after the nation's job growth slowed more than expected last month. Stock indexes hugged close to their record highs.

KEEPING SCORE: The Standard & Poor's 500 index rose 2 points, or 0.1 percent, to 2,432, as of 10:40 a.m. Eastern time. The Dow Jones industrial average added 19 points, or 0.1 percent, to 21,164, and the Nasdaq composite rose 25 points, or 0.4 percent, to 6,272. All three indexes added to records set on Thursday.

INTEREST RATES: Bond yields fell immediately following the release of Friday's jobs report. After sitting at roughly 2.20 percent shortly before the 8:30 a.m. release, the yield on the 10-year yield Treasury sank as low as 2.15 percent within 20 minutes. That's its lowest level since mid-November. It pared its loss to sit at 2.16 percent, down from 2.21 percent late Thursday.

The two-year Treasury yield fell to 1.27 percent from 1.30 percent, and the 30-year yield fell to 2.82 percent from 2.86 percent.

THE JOB MARKET: Employers added 138,000 jobs last month, short of economists' expectations. The government also said that hiring was weaker in March and April than it had earlier reported. The unemployment rate fell to 4.3 percent last month, its lowest level since 2001.

Many economists say they don't expect the latest jobs report to dissuade the Federal Reserve from raising interest rates again at its next policy meeting in two weeks. The job market and inflation remain strong enough, they say. The central bank has been trying to pull rates gradually off their record low following the Great Recession, and it has raised rates twice since December.

LOW ENERGY: Energy stocks deepened their losses for 2017 after the price of oil sank. Benchmark U.S. crude oil fell 82 cents, or 1.7 percent, to $47.54 per barrel. Brent crude, used to price international oils, sank 94 cents to $49.69 per barrel.

Energy stocks in the S&P 500 lost 1.2 percent Friday, the biggest loss among the 11 sectors that make up the index. They're down 14.1 percent for the year when the overall index is up 8.7 percent.

Transocean fell 26 cents, or 2.9 percent, to $8.97, and Marathon Oil lost 37 cents, or 2.8 percent, to $12.73.

BANK PAIN: Friday's drop in interest rates hurt financial stocks, because higher rates would have allowed banks to charge more for loans make bigger profits. Financial stocks in the S&P 500 fell 0.5 percent.

GETTING REAL: The drop in interest rates had the opposite effect for stocks in industries that pay big dividends. Real-estate investment trusts in the S&P 500 rose 0.7 percent, for example. Dividends look more attractive to income investors when bonds are paying less in interest.

STRETCHING HIGHER: Lululemon jumped $7.21, or 14.8 percent, to $55.88 after the athletic apparel company reported better results for the latest quarter than analysts expected.

GETTING HEALTHY: Cooper, a maker of surgical and contact-lens products, surged to the biggest gain in the S&P 500 after it reported stronger quarterly earnings than expected and raised its forecast for full-year profit. It rose $18.93, or 8.6 percent, to $238.72.

CHIPPING IN: Broadcom rose $15.27, or 6.5 percent, to $249.86 after the chipmaker reported stronger quarterly revenue and profit than Wall Street had forecast.

QUARTERED: RH, a home-furnishings retailer, plunged $14.60, or 25.5 percent, to $42.65 after it cut its profit forecast for the year.

COMMODITIES: Gold rose $7.70 to $1,227.80 per ounce, silver added 11 cents to $17.40 per ounce and copper lost 2 cents to $2.57 per pound.

Natural gas was close to flat at $3.00 per 1,000 cubic feet, wholesale gasoline fell 3 cents to $1.57 per gallon and heating oil dipped 2 cents to $1.48 per gallon.

CURRENCIES: The dollar fell to 110.47 Japanese yen from 111.33 yen late Thursday. The euro rose to $1.1271 from $1.1214, and the British pound fell to $1.2873 from $1.2876.

OVERSEAS MARKETS: Japan's Nikkei 225 index rose 1.6 percent to cross above the 20,000 level for the first time since 2015. Hong Kong's Hang Seng index rose 0.4 percent, and South Korea's Kospi jumped 1.2 percent.

In Europe, Germany's DAX gained 1.2 percent, and the French CAC 40 rose 0.4 percent. The FTSE 100 in London added 0.1 percent.

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AP Business Writer Youkyung Lee contributed from Seoul.

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