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Dow opens at record after strong July jobs report

NEW YORK: U.S. stocks opened higher on Friday, with the Dow hitting a record high, after data showed U.S. employers hired more workers than expected in July, signaling labor market tightness.
The Labor Department reported showed that nonfarm payrolls increased by 209,000 jobs last month, above the 183,000 rise expected by economists polled by Reuters.
June's employment gain number was revised up to 231,000 from the previously reported 222,000.
Average hourly earnings rose 0.3 percent after gaining 0.2 percent in June, while the unemployment rate fell to 4.3 percent.
The strong jobs report is likely to clear the way for the Federal Reserve to announce a plan to start shrinking its US$4.5 trillion bond portfolio in September, and could strengthen its case to raise rates for the third time this year in December.
Chances of a rate hike by the end of the year increased to 50 percent from 46 percent after the release of the data, according to CME Group's FedWatch tool.
"Not only did the July number beat, there was a net revision higher of previous months. Wages seem stuck growing at 2.5 per cent year over year, but at least they're not wavering," said Brian Jacobsen, senior investment strategist at Wells Fargo Funds Management.
"Combine this decent employment report with a weaker dollar and the Fed has no reason to deviate from its plan to shrink its balance sheet and hike one more time this year."
At 9:36 a.m. ET (1336 GMT), the Dow Jones Industrial Average was up 36.01 points, or 0.16 per cent, at 22,062.11 and the S&P 500 was up 4.55 points, or 0.18 per cent, at 2,476.71.
The Nasdaq Composite was up 6.61 points, or 0.1 per cent, at 6,346.95.
Ten of the 11 major S&P sectors were higher, with the financial index's 0.65 per cent rise leading the advancers.
The S&P 500 has risen 11 per cent in 2017 despite doubts in President Donald Trump's ability to fulfill his promises of cutting taxes and increasing infrastructure spending.
A strong earnings season has helped allay concerns about stretched valuation, with the S&P 5trading at a pricey 18 times expected earnings, compared with its 10-year average of 14.
Analysts expect earnings of S&P 500 companies to have risen 11.8 percent, while projecting a 9.2 per cent rise in earnings for the September quarter, according to Thomson Reuters I/B/E/S.
Shares of Viacom fell 9.61 per cent after the company forecast a low single-digit dip in sales to U.S. pay-TV companies and streaming video services this quarter.
Yelp jumped 21.74 per cent after the company said it would sell its Eat24 business to Grubhub for US$287.5 million and reported a better-than-expected quarterly revenue. Grubhub was up 1.78 per cent.
GoPro rose 13.08 per cent, while Weight Watchers was up 21.28 per cent after well-received quarterly earning reports.
Advancing issues outnumbered decliners on the NYSE by 1,619 to 797. On the Nasdaq, 1,269 issues rose and 907 fell.

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