Wall Street surges on Powell remarks
NEW YORK: Wall Street surged to close at its highest level in two weeks on Friday, local time, after a strong jobs report and assurances from US Federal Reserve chairman Jerome Powell that the central bank would be patient and flexible in steering the course of interest rates.
The Dow Jones Industrial Average rose 746.94 points, or 3.29%, to 23,433.16, the S&P 500 gained 84.05 points, or 3.43%, to 2531.94 and the Nasdaq Composite added 275.35 points, or 4.26%, to 6738.86.
Technology stocks led the charge, jumping 4.3%, bouncing back from the previous session’s worst day for the sector in over seven years.
The Labour Department’s employment report showed the US economy added 312,000 new jobs in December, far more than the 177,000 analysts expected.
Mr Powell, in remarks to the American Economic Association, soothed market nerves with assurances that the central bank was sensitive to risks that worry investors and was not on a preset path of interest rate hikes.
‘‘When you get such a strong jobs report and a Fed chairman saying he’s patient and flexible it sends a message to the markets that we’re moving in the right direction,’’ Robert Pavlik, chief investment strategist, senior portfolio manager at SlateStone Wealth in New York, said.
‘‘We’re not out of the woods yet,’’ Mr Pavlik added. ‘‘But it’s the first time [Powell has] said anything that’s dovish enough for the markets’ liking.’’
News that China and the United States would hold trade talks in Beijing this week helped tariffvulnerable industrials lead the Dow’s rally, headed by Caterpillar, United Technologies, 3M and Boeing.
‘‘The market’s been grappling with growth, the Fed and China,’’ Tony Roth, chief investment officer at Wilmington Trust in Wilmington, Delaware, said.
‘‘Those have been addressed today in a direct way.’’
Keeping with Friday’s riskon theme, oil prices rose in tandem with equities.
Brent crude futures rose $US1.11 to settle at $US57.06 ($NZ84.70) a barrel, a 1.98% gain. US crude futures settled 87c higher at $US47.96 a barrel, a 1.85% gain.
Safehaven assets retreated. Treasury yields rose sharply, and the dollar gained 0.8% against the yen. Spot gold prices, which reached a sixmonth peak on Thursday, dropped 0.7%.