WASHINGTON (dpa-AFX) - Following the significant rebound seen over the course of the previous session, stocks showed another substantial move to the upside during trading on Friday. With the rally, the major averages further offset the steep losses posted on Tuesday and Wednesday.
The major averages finished the session just off their best levels of the day. The Dow soared 372.68 points or 1.4 percent to 26,573.72, the Nasdaq surged up 110.21 points or 1.4 percent to 7,982.47 and the S&P 500 spiked 41.38 points or 1.4 percent to 2,952.01.
For the week, the major averages turned in a mixed performance. While the Nasdaq rose by 0.5 percent, the S&P 500 fell by 0.3 percent and the Dow slid by 0.9 percent.
The rally on Wall Street came following the release of a closely watched Labor Department report showing weaker than expected job growth but an unexpected drop in the unemployment rate to a nearly 50-year low.
The mixed data seemed to serve the dual purpose of reinforcing expectations the Federal Reserve will continue cutting interest rates while at the same offsetting concerns about a potential recession.
The report said non-farm payroll employment rose by 136,000 jobs in September compared to economist estimates for an increase of about 145,000 jobs.
Meanwhile, the increases in employment in July and August were upwardly revised to 166,000 jobs and 168,000 jobs, respectively, reflecting the addition of 45,000 more jobs than previously reported.
The average monthly job growth has still slowed from 223,000 jobs per month in 2018 to 161,000 jobs per month so far in 2019.
The Labor Department also said the unemployment rate fell to 3.5 percent in September from 3.7 percent in August. Economists had expected to unemployment rate to remain unchanged.
With the unexpected decrease, the unemployment rate dropped to its lowest level since hitting a matching rate in December of 1969.
The unexpected drop in the unemployment rate came as a 391,000-person jump in the household survey measure of employment more than offset an 117,000-person increase in the size of the labor force.
Even with the unemployment rate hitting a nearly 50-year low, the report said average hourly employee earnings edged down by a penny to $28.09 in September after rising by 11 cents in August.
Compared to the same month a year ago, average hourly earnings were up by 2.9 percent in September, reflecting a notable slowdown from the 3.2 percent increase in August.
Citing headwinds from weaker global growth, trade uncertainty and the strong U.S. dollar, ING Chief International Economist James Knightley expects job growth to average closer to 120,000 for the rest of the year.
'This suggests pay growth is unlikely to accelerate markedly from here and with inflation picking up, the real wage growth story may not be as positive for spending power,' Knightley said. 'All in all, it looks as though the Fed will need to step in with more policy easing to support the economy.'
Stocks saw further upside in afternoon trading after Fed Chairman Jerome Powell described the U.S. economy as 'in a good place,' and said it is the central bank's job to 'keep it there as long as possible.'
Sector News
Gold stocks moved sharply higher over the course of the trading session, driving the NYSE Arca Gold Bugs Index up by 2.1 percent.
The rally by gold stocks came despite a modest decrease by the price of the precious metal, as gold for December delivery edged down $0.90 to $1,512.90 an ounce.
Significant strength also emerged among semiconductor stocks, with the Philadelphia Semiconductor Index surging up by 1.9 percent.
Financial, housing, software, and healthcare stocks also saw considerable strength amid broad based buying interest on Wall Street.
Other Markets
In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance during trading on Friday. Japan's Nikkei 225 Index rose by 0.3 percent, while Hong Kong's Hang Seng Index slumped by 1.1 percent.
Meanwhile, the major European markets all moved to the upside on the day. While the U.K.'s FTSE 100 Index surged up by 1.1 percent, the French CAC 40 Index advanced by 0.9 percent and the German DAX Index climbed by 0.7 percent.
In the bond market, treasuries extended a recent upward trend following the monthly jobs report. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, fell by 2.1 basis points to 1.515 percent.
Looking Ahead
Next week's trading may be driven by reaction to news out of the latest round of high-level U.S.-China trade talks in Washington, D.C.
Reports on producer and consumer price inflation may also attract attention along with the minutes of the Federal Reserve's latest monetary policy meeting.
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