FINANCIAL MARKETS
NEW YORK—The stock market surged to its biggest gain since early September Friday after another strong month of hiring by U.S. employers. The solid news on the economy opened the way for the Federal Reserve to begin raising interest rates back toward normal levels later this month. Energy stocks and the price of crude oil fell after OPEC said it won’t cut production.
Stocks started the day higher after the Labor Department said employers added 211,000 jobs in November. That was more than investors expected, and a sign that consumers are still spending and keeping the economy afloat even as manufacturing and energy companies are struggling. The rally gained more power after European Central Bank President Mario Draghi said the ECB is ready to expand its stimulus program if necessary. That was a relief: stocks and bonds tumbled Thursday after the ECB announced some new stimulus measures, but didn’t do as much as investors expected. The Dow Jones industrial average rose 369.96 points, or 2.1 percent, to 17,847.63. The Standard & Poor’s 500 index had its best day since Sept. 8, rising 42.07 points, or 2.1 percent, to 2,091.69. The Nasdaq composite increased 104.74 points, or 2.1 percent, to 5,142.27 points. When the Federal Reserve decided not to raise interest rates in September, investors gradually concluded that the Fed would act in December unless it received some big warning signs about the health of the economy. Those signs never came. The September jobs report was disappointing, but hiring climbed in October, and November hiring was solid. The government also said the economy gained more jobs in September and October than it initially reported. Energy stocks, however, took a beating, and almost all of the largest losses in the S&P 500 went to energy companies. Oil cartel OPEC said it won’t cut oil production even though global stockpiles keep growing. The price of oil is trading near six-year lows.
The price of U.S. crude fell $1.11, or 2.7 percent, to $39.97 a barrel in New York. Brent crude, a benchmark for international oils, slid 84 cents, or 1.9 percent, to $43. Meanwhile warm weather in the U.S. is hurting demand for heating fuels like natural gas and heating oil. Natural gas drillers, pipeline companies and oil and gas service companies were all pummeled.
In other trading of energy futures, wholesale gasoline fell 2.6 cents, or 2 percent, to $1.27 a gallon. Heating oil declined 1.6 cents to $1.342 a gallon. Natural gas inched up 0.5 cents to $2.816 per 1,000 cubic feet.