Wall Street surged on Friday after moderate jobs growth data from last month offered relief from a spate of dismal economic data this week that has rankled markets and fueled concerns that the world’s largest economy might be sliding into a recession.
A rally in technology stocks led by Apple Inc also helped lift the benchmark indices at the end of a rollercoaster week. After losing about 3 percent over Tuesday and Wednesday, the S&P 500 on Friday logged its biggest one-day gain since Aug. 16, thanks in part to a late-session surge.
Still, for a third consecutive week, the Dow Jones Industrial Average and S&P 500 lost ground.
The US Department of Labor’s report showed that non-farm payrolls last month increased by 136,000 and the 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 that the Fed will cut interest rates have surged this week after a dramatic contraction in US manufacturing, cooling private-sector hiring and a fall in service-sector activity pointed to widening fallout from the US-China trade dispute.
Traders see a 77.5 percent chance that the central bank will lower borrowing costs at its policy meeting later this month, up from 40 percent on Monday.
The Fed last month cut rates for the second time this year and said future reductions would be “data-dependent.”
With fears related to the trade dispute and its effect on the US economy weighing on sentiment, the S&P 500 is up 2 percent over the past 12 months, and about 2 percent off its record-high close in July.
“Although market participants have been selling stocks and buying bonds, at the end of the day you say: ‘Gee, I still have to have some return for my investment, and that’s going to come from stocks,’” Globalt Investments senior portfolio manager Tom Martin said.
Apple shares rose 2.8 percent after a report that the company would ramp up production of iPhone 11 models.
The S&P information technology index climbed 1.7 percent, while the Philadelphia chip index advanced 1.9 percent.
All 11 major sector indices rose, led by a 1.9 percent jump in the S&P financials.
The Dow Jones Industrial Average jumped 1.42 percent to close at 26,573.72 points, while the S&P 500 also surged 1.42 percent, finishing at 2,952.01. The NASDAQ Composite added 1.4 percent to end at 7,982.47.
Volume on US exchanges was light at 5.9 billion shares, compared with the 7.3 billion average for the full session over the past 20 trading days.
For the week, the S&P 500 fell 0.3 percent and the Dow lost 0.9 percent, while the NASDAQ added 0.5 percent.
During Friday’s session, HP Inc tumbled 9.6 percent after the computer maker said it would cut up to 16 percent of its workforce as part of a restructuring plan that would result in an overall charge of US$1 billion.
Advancing issues outnumbered declining ones on the New York Stock Exchange by a 3.12-to-1 ratio; on NASDAQ, a 2.26-to-1 ratio favored advancers.
The S&P 500 posted 18 new 52-week highs and one new low; the NASDAQ Composite recorded 17 new highs and 70 new lows.
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