S&P 500, Dow headed for best day in a month after 'Goldilocks' jobs data
New York (Oct 5) - U.S. stocks climbed on Friday as moderate jobs growth in September offered some relief from a spate of dismal economic data this week that has rankled markets and fueled concerns that the world’s largest economy was sliding into a recession.
A rally in technology stocks led by Apple Inc (AAPL.O) also helped lift Wall Street's main indexes at the end of a volatile week. After losing about 3% on Tuesday and Wednesday, the S&P 500 .SPX and Dow .DJI were on course for their best day in a month on Friday.
The Labor Department’s report showed nonfarm payrolls increased by 136,000 last month and unemployment rate dropped to a 50-year low, but manufacturing payrolls declined for the first time in six months.
“It’s sort of a Goldilocks report: it’s not strong enough to move the Federal Reserve away from cutting rates at the end of October, but it’s not weak enough to make you concerned about the labor market or the consumer,” said Shawn Snyder, head of investment strategy at Citi Personal Wealth Management in New York.
Bets of interest rate cuts by the Fed have surged this week after a dramatic contraction in U.S. manufacturing, cooling private sector hiring and a fall in service sector activity evidenced the fallout from a prolonged U.S.-China trade war.
Traders currently see a 77.5% chance for the central bank to lower borrowing costs at its policy meeting later this month, up from 40% on Monday.
The Fed cut rates in September for the second time this year and said future reductions would be “data-dependent”.
The S&P had gapped lower on Wednesday after bleak manufacturing data, but Friday’s gains have helped the index climb back to near its Tuesday close.
The benchmark index is now 3% away from its record high hit in July after coming within striking distance of it two weeks ago.
Apple Inc (AAPL.O) shares rose 2.4% after a report that the company would ramp up production of iPhone 11 models.
The broader technology sector .SPLRCT was up 1.26%, rising the most among 11 major S&P sectors. The Philadelphia chip index .SOX advanced 1.18%.
At 12:59 p.m. ET (1659 GMT), the Dow Jones Industrial Average .DJI was up 235.82 points, or 0.90%, at 26,436.86 and the S&P 500 .SPX was up 26.80 points, or 0.92%, at 2,937.43. The Nasdaq Composite .IXIC was up 73.81 points, or 0.94%, at 7,946.08.
HP Inc (HPQ.N) tumbled 9.2% after the PC maker said it would cut up to 16% of its workforce as part of a restructuring plan that would result in an overall charge of $1 billion.
Advancing issues outnumbered decliners by a 2.12-to-1 ratio on the NYSE and 1.59-to-1 ratio on the Nasdaq.
The S&P index recorded 13 new 52-week highs and one new low, while the Nasdaq recorded 13 new highs and 57 new lows.
Reuters
