(Reuters) – Wall Street climbed higher on Friday, lifted by a much better-than-expected nonfarm payrolls data and as financial stocks gained on expectations of simpler bank regulations.
The U.S. Labor Department said 227,000 jobs were created in the public and private sectors in January, as construction and retailers ramped up hiring. Economists had expected 175,000 jobs to be added.
Unemployment rate ticked up to 4.8 percent, still below the 5 percent level considered to be full employment.
However, average hourly wages grew by only three cents or 0.1 percent.
“Continued strong job creation is tempered by the renewed sluggishness in wage growth, raising questions once again about the extent to which the functioning of the labor market has evolved,” said Mohamed El-Erian, chief economic adviser at Allianz in Newport Beach, California.
“The sluggish wage growth will make the Fed more cautious about hiking in March.”
Chicago Federal Reserve President and voting member Charles Evans said the central bank should raise interest rates gradually even as fiscal policies under President Donald Trump are likely to help push economic growth beyond sustainable levels.
Bank stocks rose as Trump prepared to scale back the Dodd-Frank Wall Street reform law, which was enacted in the wake of the 2007-2009 financial crisis.
The S&P 500 financial sector rose 1.4 percent, outperforming the gains in the other nine major S&P sectors.
Citigroup, Bank of America, Goldman Sachs and JPMorgan were up between 1.6 percent and 2.3 percent.
At 9:34 a.m. ET (1434 GMT), the Dow Jones Industrial Average was up 88.67 points, or 0.45 percent, at 19,973.58.
The S&P 500 was up 8.1 points, or 0.35 percent, at 2,288.95 and the Nasdaq Composite was up 13.86 points, or 0.25 percent, at 5,650.06.
Among stocks, Dow component Visa rose 4.2 percent to $85.75 following quarterly profit and revenue that beat analysts’ expectations.
Amazon.com fell 4 percent to $805.59 after the world’s largest online retailer forecast a surprise dip in operating profit for the current quarter. The stock was the biggest drag on the S&P 500 consumer discretionary index.
Apparel and footwear maker Deckers Outdoor dropped 21 percent to $43.87 after missing quarterly revenue estimates.
Advancing issues outnumbered decliners on the NYSE by 2,088 to 508. On the Nasdaq, 1,674 issues rose and 532 fell.
The S&P 500 index showed 13 new 52-week highs and three new lows, while the Nasdaq recorded 50 new highs and five new lows.
(Reporting by Yashaswini Swamynathan in Bengaluru; Editing by Sriraj Kalluvila)