Sluggish US jobs data buoys Wall Street on reduced Fed fears

VIDEO: REUTERS

NEW YORK (AFP) - The Nasdaq rose to its second straight record close on Friday (Sept 1) as Wall Street had another positive finish, with investors increasingly confident the US central bank will not raise interest rates again soon.

While many economists discounted the lacklustre monthly report on US job creation, the data boosted perceptions that the Federal Reserve will not have the votes for a third rate hike of the year, which had been widely expected in December.

At the close of a quiet week just before the long holiday weekend, the blue-chip Dow Jones Industrial Average and broader S&P 500 had both gained 0.2 per cent to finish at 21,987.56 and 2,476.55, respectively.

The Nasdaq managed less of an increase than in prior sessions but still set a new record, adding 0.1 per cent to settle at 6,435.33 The Labour Department reported the US added 156,000 new positions in August, well below analyst expectations.

However, analysts said the slowdown was likely more statistical than real and that underlying trends were probably unaffected.

Even so, traders took the information at face value in terms of the impact on interest rates.

"The report reduces the chances of the Fed hiking in December," Karl Haeling of LBBW told AFP.

Investors were cheered by recent highs for metal prices and bullish economic data out of China, he added.

In other data, manufacturing activity hit a six-year high, rising to 58.8 points in August, according to the Institute for Supply Management's monthly survey.

An array of automakers saw shares rise after either posting strong sales or lower-than-feared sales declines last month.

General Motors jumped 0.9 per cent after reporting that August sales were up 7.5 per cent over the same month last year. Volkswagen added 0.7 per cent after its market share rose 0.3 points to 2.2 per cent, with US sales up 9 per cent.

Ford Motor Company gained 2.9 per cent despite a 2.1 per cent dip in sales.

Oil stocks also continued rising as worries about Hurricane Harvey receded into the past and efforts to restart refining gained steam.

ConocoPhillips rose 1.3 per cent, Chevron added one percent and both Royal Dutch Shell and ExxonMobil rose 0.3 per cent.