The uptick in unemployment last month was just bad enough to be a good thing — at least according to Wall Street.
Retail stocks rose 1.7 percent today after the Labor Department said the economy added 175,000 jobs, slightly more than expected, and the unemployment rate ticked up to 7.6 percent. Investors worried this week that the employment report would be strong enough for the Federal Reserve to pull back on its monetary stimulus, raising interest rates and clamping down on stocks.
For now, the coast seems to be clear. Although some Fed officials have said they want to take their foot of the gas and stop buying up debt, they have more or less committed to keeping interest rates low until unemployment falls to 6.5 percent.
“The Fed is unlikely to taper off the pace of bond purchases based on today’s number,” said IHS chief economist Nariman Behravesh. “It would likely take a steady stream of payroll increases of around 175,000 — or more — and declines in the unemployment rate before the Fed can ‘declare victory.’”
The S&P 500 Retailing Industry Group rose 13.60 points, to 794.67, as the Dow Jones Industrial Average increased 1.4 percent, or 207.50 points, to 15,248.12.
Among the retail gainers were Abercrombie & Fitch Co., up 4.2 percent to $51.70; Amazon.com Inc., 3.4 percent to $276.87; J.C. Penney Co. Inc., 3.2 percent to $18.73; Gap Inc., 2.7 percent to $42.09, and Lululemon Athletica Inc., 2.4 percent to $81.43.
Markets were also on the rise in Europe.
The DAX in Frankfurt led the uptick, advancing 1.9 percent to 8,254.68 while the CAC 40 in Paris was up 1.5 percent to 3,872.59 and the FTSE 100 in London rose 1.2 percent to 6,411.99. The FTSE MIB in Milan advanced 1 percent to 16,691.06.
The euro traded at $1.31 against the dollar while the pound fetched $1.55 and the Swiss franc equaled $1.07.
Retail and luxury stocks were mostly up, with the day’s biggest gainers including Safilo Group, up 2.7 percent to 15.87 euros; Yoox.com, 5.5 percent to 16.56 euros; Marks & Spencer Group, 2.3 percent to 4.52 pounds, and Compagnie Financière Richemont, 3.9 percent to 84.70 Swiss francs.