Markets stage strong rebound
A day after big losses, the major U.S. indexes all jump more than 3%, the latest twist in a wild three months.
Stocks soared Friday on Wall Street, reversing the big losses they suffered the day before. The major U.S. indexes all jumped more than 3%, the latest twist in a wild three months for markets.
Hopes for progress in the U.S.-China trade dispute, a strong report on the U.S. jobs market and encouraging comments from the head of the Federal Reserve about the central bank’s interest rate policy all combined to cheer investors.
China’s Commerce Ministry said trade talks will be held Monday and Tuesday in Beijing, and investors will look for signs the world’s largest economic powers are resolving their dispute. The tension has dragged on for nearly a year, slowing business and dragging down stock indexes worldwide.
Meanwhile, the Labor Department said U.S. employers added a net 312,000 jobs last month, far more than expected.
U.S. stocks have tumbled since October as investors worried that the nation’s economy might slow dramatically because of challenges including the U.S.China trade war and rising interest rates.
“It’s hard to square recession worries with the strongest job growth we’ve seen in years,” said Alec Young, managing director of global markets research for FTSE Russell.
Stocks rose even further after Federal Reserve Chairman Jerome H. Powell said the central bank will be flexible in deciding if and when it raises interest rates. He added that the Fed is open to making changes in the way it shrinks its giant portfolio of bonds, which affects rates on long-term loans such as mortgages.
The Standard & Poor’s 500 index climbed 84.05 points, or 3.4%, to 2,531.94 on Friday, more than wiping out its Thursday loss. The Dow Jones industrial average advanced 746.94 points, or 3.3%, to 23,433.16. The Nasdaq composite jumped 275.35 points, or 4.3%, to 6,738.86.
About 90% of the stocks on the New York Stock Exchange gained ground.
The biggest gainer in the S&P 500 was Mattel, which leaped 12.3% to $10.41.
Stocks sank Thursday after Apple said iPhone sales in China were falling, partly because of the trade war, and a survey suggested U.S. manufacturing grew at a weaker pace. Technology companies took their biggest losses in seven years.
Technology, healthcare and industrial firms and banks made strong gains Friday. Most of the companies in those industries stand to do better in times of faster economic growth.
Smaller and more U.S.focused companies did even better than larger multinationals. The Russell 2000 index surged 49.92 points, or 3.8%, to 1,380.75. Smaller companies have fallen further than larger ones in the last few months as investors grew nervous about how the U.S. economy would perform this year and next.
Stocks have whipsawed between gains and losses for the last few weeks after their December plunge. Katie Nixon, chief investment officer for Northern Trust Wealth Management, said investors will keep reacting to the economy’s health and to concerns about high levels of corporate debt as interest rates rise.
“We don’t expect that this will be the end to the volatility,” she said. “There’s mounting evidence we’re going to see a slowdown,” albeit not a severe one.
Bond prices fell sharply. The yield on the 10-year Treasury note rose to 2.66% after it plunged to 2.55% on Thursday, which was its lowest in almost a year.
U.S. benchmark crude oil rose 1.8% to $47.96 a barrel. Brent crude, used to price international oils, climbed 2% to $57.06 a barrel.
Wholesale gasoline slipped 0.1% to $1.35 a gallon. Heating oil climbed 1.6% to $1.77 a gallon. Natural gas jumped 3.4% to $3.04 per 1,000 cubic feet.
Gold fell 0.7% to $1,285.80 an ounce. Silver slipped 0.1% to $15.79 an ounce. Copper rose 3.1% to $2.65 a pound.