Stocks moved sharply higher at the start of trading on Friday, as traders reacted positively to the latest U.S. jobs report. The major averages showed strong moves back to the upside after closing lower in each of the four previous sessions.
The major averages have not seen much follow-through on their initial upward move but remain firmly positive. The Dow is up 174.68 points or 1.4 percent at 13,053.56, the Nasdaq is up 48.26 points or 1.7 percent at 2,958.03 and the S&P 500 is up 21.01 points or 1.5 percent at 1,386.01.
The early strength on Wall Street came on the heels of the release of a report from the Labor Department showing stronger than expected U.S. job growth in the month of July.
The Labor Department said non-farm payroll employment increased by 163,000 jobs in July following a downwardly revised increase of 64,000 jobs in June. Economists had expected employment to increase by about 100,000 jobs.
Despite the stronger than expected job growth for the month, the unemployment rate edged up to 8.3 percent in July from 8.2 percent in June. The increase surprised economists, who had expected the unemployment rate to come in unchanged.
The unexpected drop by the unemployment rate came as the more volatile household survey showed that the number of employed persons fell by 195,000 in July, exceeding the decrease in the size of the labor force.
Peter Boockvar, managing director at Miller Tabak, said, "As measured by the payroll survey, the job creation in July was encouraging in light of the growing signs of economic slowdown but wasn't equally matched by the very volatile household survey which fell and was the main factor in the rise in the unemployment rate."
"In terms of impacting Fed policy, this data point will unlikely affect their desire to do more in September if the economy doesn't get any better from here," he added.
Most of the major sectors have moved notably higher in early trading, with steel stocks posting particularly strong gains. Reflecting the strength in the steel sector, the NYSE Arca Steel Index has surged up by 3.4 percent.
Electronic storage stocks have also moved sharply higher, driving the NYSE Arca Disk Drive Index up by 2.9 percent. Healthcare provider, defense, biotech and oil service stocks are also posting notable gains.
In overseas trading, stock markets across the Asia-Pacific region turned in yet another mixed performance on Friday. While Japan's Nikkei 225 Index tumbled by 1.1 percent, China's Shanghai Composite Index surged up by 1 percent.
Meanwhile, the major European markets have all shown strong moves back to the upside. The U.K.'s FTSE 100 Index has jumped by 1.8 percent, while the German DAX Index and the French CAC 40 Index have spiked up by 2.7 percent and 3.1 percent, respectively.
In the bond market, treasuries have come under pressure following the upbeat jobs data. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is up by 6.1 basis points at 1.539 percent.
by RTT Staff Writer
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