Stocks surged on Friday, with the Dow Jones Industrial Average rising more than 700 points after Federal Reserve Chair Jerome Powell indicated that monetary policy will remain flexible in 2019 and a strong jobs report eased concern that economic growth is slowing.
Powell said at a panel discussion in Atlanta with his predecessors Janet Yellen and Ben Bernanke that monetary policy is “not on a preset course.”
Stocks opened the day higher after the Labor Department reported that nonfarm payrolls in the US increased in December by 312,000, well above consensus estimates of 177,000 jobs created.
The Dow soared 746.94 points, or 3.3%, to hit 23,433.16, while the tech-laden Nasdaq advanced 4.3% to 6,738.86.
The S&P 500 added 3.4% to hit 2,531.94, and in Canada, the TSX increased 1.5% to 14,426.62.
Zeroing in on small-caps, the Russell 2000 index surged 3.8% to 1,380.75.
13:30 AM: Dow soars by almost 800 points on dovish remarks from Fed chair Jerome Powell
The Dow Jones Industrial Average surged by more than 700 points in afternoon trading in the wake of dovish remarks from Federal Reserve chairman Jerome Powell.
At a panel discussion with former Fed chairs Janet Yellen and Ben Bernanke in Atlanta, Powell indicated that monetary policy will remain flexible in 2019.
Delivering his address at a time of considerable volatility in the equity markets, Powell suggested the US central bank would adopt a dovish stance in laying out the next interest rate hikes and that monetary policy is “not on a preset course”.
In response, the Dow soared 780 points to hit 23,461 while the tech-laden Nasdaq added 291 points to trade at 6,754.
The tech sector performed particularly well, with Netflix (NASDAQ:NFLX) adding 9.4% to hit $296.75 thanks to Goldman Sachs’ decision to include the streaming service on its conviction buy list. Intel, Facebook, Amazon and Apple were also all up more than 4% in afternoon trade.
The Dow and Nasdaq’s respective climbs added to gains earlier in the day that followed news that nonfarm payroll employment in the US increased by 312,000 in December, well above consensus estimates of 177,000 jobs created. The report helped to assuage worries that economic growth is turning sluggish.
While its momentum was more muted, the S&P 500 also added 79 points to hit 2,527 and in Canada, Toronto’s TSX popped by 210 points to hit 14,423.
Zeroing in on smaller companies, the Russell 2000 index rose 49 points to hover at 1,380.
10:00 AM: Dow posts triple-digit gain as strong US jobs report eases economic concern
US stocks rallied on Friday after the Labor Department published a strong jobs report, easing concern that global economic growth is slowing.
The Dow Jones Industrial Average climbed 358.59 points, or 1.6%, to 23,044.81 after tumbling 660 points on Thursday.
The Bureau of Labor Statistics reported that nonfarm payroll employment increased by 312,000 in December, well above consensus estimates of 177,000 jobs created. The unemployment rate rose to 3.9%, up from 3.7% the previous month.
The US mining industry increased employment by 3,700 jobs to 710,700 positions in December.
The Nasdaq Composite climbed 1.8% while the broader-based S&P 500 Index advanced 1.7%.
7:11 AM: US stocks seen bouncing back at end of week as all eyes on December jobs report
US stocks are seen starting higher at the end of the week after the bloodbath yesterday, which saw the Dow Jones Industrial Average sink 660 points.
The Nasdaq lost 202 points to close the day at 6,463 and the S&P 500 lost over 62 points at 2,447 amid global trader uncertainty.
Today brings the closely watched jobs data as the US Labor department reveals the non-farm payrolls for December.
Economists reportedly expect that the US economy added 178,000 jobs in the month, while the jobless rate is expected to remain near 50-year lows at 3.7%.
The US added 155,000 jobs in November, so that would be a robust number and show that hiring was still strong in the world's largest economy.
But the report could show signs of where things are headed for 2019 in America amid continued trade uncertainty and as tax cut effects wear off.
Dean Popplewell, market analyst at Forex group Oanda, noted that the ADP private sector jobs measure that came out yesterday showed a 271,000 surge in jobs, providing further evidence that the U.S economy remains in "healthy shape".
"Yesterday’s ADP reading was driven mainly by the service sector, while employment growth in the goods-producing sector also picked up, although that was mostly driven by construction," he said.
"With the market pricing out any Fed hikes for this year, will a strong NFP print this morning see dealers reversing their decision that the Fed is ready to abandon its rate hike plans when employment growth is still so strong?" he questioned.
European shares are also bouncing back from yesterday's lows. The FTSE 100 in London is up almost 93 points at 6,785. The German DAX is up over 184 points at 10,601.
In Toronto, the TSX lost over 134 points yesterday. In Asia, Japan's Nikkei 225 tanked over 452 points in the wake of Apple's revenue warning but the Shanghai Composite Index in China added around 50 points.
In US futures trade today, the Dow Jones is ahead by 309 points; the S&P 500 is up 35 and the Nasdaq futures are up 114 points.