In an AP interview, Democratic Senator Doug Jones of Alabama tells the Associated Press President Donald Trump’s tariff talk is spooking farmers, automobile manufacturers and others in the deep-red state. (Dec. 12)
The Dow finished more than 700 points higher on Friday, erasing the previous day’s rout, following a blockbuster jobs report and comments from the Federal Reserve chairman that eased interest rate fears.
The Dow Jones industrial average climbed 747 points, or 3.3 percent, to end Friday at 23,433. The broader Standard & Poor’s 500 stock index closed 84 points higher, or a gain of 3.4 percent, to 2,532.
“So today we got a whole bunch of very good news,” said Vinay Pande, global head of trading strategies at UBS, “which is a very welcomed change.”
The tech-heavy Nasdaq finished 275 points higher, or an increase of 4.3 percent, to 6,739 Friday. The performance pulled the tech-heavy index out of a bear market, a 20-percent or more decline from its recent closing high.
The Russell 2000, an index of small-company stocks, increased 50 points, or 3.8 percent, to close at 1,381.
Friday started strongly for stock investors when the Labor Department reported that employers added 312,000 jobs in December, eclipsing the 181,000 job gains that economists had expected, according to a Bloomberg survey.
“This is a very strong jobs number. It tells us we’re nowhere close to a recession,” said Michael Ning, chief investment officer of PhaseCapital.
Federal Reserve Chairman Jerome Powell followed with a promise to be patient when it came to future interest rate hikes during a panel Friday with former Fed chairs Janet Yellen and Ben Bernanke.
The comments soothed traders’ worries that the central bank will raise rates too fast, hampering corporate growth.
“What he said today is that everything is on the table. We’re not on autopilot. We respond to data,” Pande said.
Stocks were also buoyed by overnight developments overseas. China reduced its reserve requirements for banks to stimulate growth. At the same time, officials from the U.S. and China agreed to restart trade talks next week, soothing tensions between the countries.
Friday’s gains follow a 660-point drop in the blue-chip average the day before over fears of a slowing global economy. The S&P 500 closed 2.5 percent lower, while the Nasdaq dropped 3 percent.
A warning this week from Apple about soft revenue and iPhone sales coupled with a weak manufacturing reading on Thursday had revived investor concerns of a slowdown around the world. An upbeat hiring report that foreshadowed Friday’s blockbuster job figures didn’t move sentiment.
“The markets focused too much on the negatives … and ignored the payroll report,” said John Lynch, chief investment strategist for LPL Research. “It’s time for investors to reassess that we might be slowing, but we’re still growing.”
Read or Share this story: https://www.usatoday.com/story/money/2019/01/04/dow-stock-market/2480437002/