* U.S. unemployment rate falls, but payrolls disappoint
* LinkedIn, AIG shares rise after results
* Dell committee and buyout group announce agreement, shares
* Dow up 0.2 pct, S&P up 0.2 pct, Nasdaq up 0.4 pct
By Caroline Valetkevitch
NEW YORK, Aug 2 (Reuters) - The Dow industrials and S&P 500
ended at record highs for a second day on Friday, posting modest
gains despite a mixed employment report that showed U.S. hiring
slowed in July.
All but three of the 10 S&P 500 sectors ended higher, led by
gains in the consumer discretionary index, up 0.7
The jobs report showed non-farm payrolls rose by 162,000 in
July, below expectations, but the unemployment rate fell to 7.4
percent, its lowest since December 2008. The mixed data could
make the Federal Reserve more cautious about scaling back its
massive economic stimulus.
The tepid report follows a series of better-than-expected
data and optimism about strong growth in the second half of the
"The employment number clearly was a surprise on the
downside," said Eric Kuby, chief investment officer at North
Star Investment Management Corp in Chicago.
"That the jobs picture has improved is pretty well
established, so (the report) may not be the driver that it was
before," Kuby said.
Among the biggest drags on both the S&P 500 and the Dow was
Chevron, the second-largest U.S. oil company. Its shares
fell 1.2 percent to $124.95. The company posted a
steeper-than-expected 26 percent drop in quarterly profit.
The Dow Jones industrial average was up 30.34 points,
or 0.19 percent, at 15,658.36, a record close. The Standard &
Poor's 500 Index was up 2.80 points, or 0.16 percent, at
1,709.67, also a record. The Nasdaq Composite Index was
up 13.84 points, or 0.38 percent, at 3,689.59.
Stocks bounced late in the day after trading mostly flat,
and both the Dow and S&P 500 also reached intraday record highs.
"This may be a little bit of traders not wanting to go into
the weekend short," said Fred Dickson, chief market strategist
at D.A. Davidson & Co in Lake Oswego, Oregon.
Second-quarter earnings have mostly beaten expectations,
with the season in its final innings. Of the 391 companies of
the S&P 500 that have reported, 67.8 percent have topped analyst
expectations, in line with the average beat over the past four
quarters, data from Thomson Reuters showed. About 55 percent
have reported revenue above estimates, more than in the past
four quarters but below the historical average.
LinkedIn shares jumped 10.6 percent to $235.58 and
several brokerages raised their price targets on the stock after
results on Thursday topped expectations.
Dell's special committee and a group led by founder
and Chief Executive Michael Dell announced a deal that
dramatically increases the chances of his $24.6 billion buyout
going through. Dell shares gained 5.6 percent to $13.68.
Among the day's losers, shares of Time Warner Cable
fell 0.5 percent to $117.10 after news that Cox Communications
Inc has held talks about merging with cable provider and rival
Charter Communications Inc. Charter added 4.7 percent
Volume was roughly 5.68 billion shares traded on the New
York Stock Exchange, the Nasdaq and the NYSE MKT, below the
average daily closing volume of about 6.4 billion this year.
Advancers beat decliners on the NYSE by about 15 to 14,
while on the Nasdaq decliners beat advancers by about 13 to 11.