U.S. stocks rally after strong jobs data, dovish Fed comments

A street sign Wall Street is seen outside New York Stock Exchange in New York City New York

A street sign Wall Street is seen outside New York Stock Exchange in New York City New York

Friday's advance, measured by the number of stocks rising versus those falling, was the broadest in more than eight years.

The job market is still robust.

Stocks rallied further after Fed Chair Jerome Powell told a gathering of economists that the U.S. central bank had no "pre-set" plan for interest rates and was carefully monitoring economic conditions. All three of those events addressed issues that investors have been particularly concerned about over the past several months.

On December 19, the Federal Reserve increased the interest rate for the fourth time in 2018 - from 2.25 percent to 2.5 percent. The Dow has risen 1,641 points since Xmas Eve.

The Dow Jones Industrial Average climbed 746.94 points (3.29 per cent) to end the week at 23,433.16. Every sector was up on Friday.

All three major US stock indexes more than regained ground lost in Thursday's broad sell-off, rising more than 3 percent and setting up the indexes to post weekly gains at the end of the first, tumultuous week of the new year. The S&P 500 fell 2.5 per cent after Apple said iPhone sales in China are falling and a survey suggested us factories grew at a weaker pace.

Benchmark 10-year Treasury notes last fell 32/32 in price to yield 2.6641 percent, from 2.553 percent late on Thursday.

Each of the FAANG momentum stocks, a group that includes Facebook Inc, Apple, Amazon.com Inc, Netflix Inc and Google parent Alphabet Inc were trading higher. "This proves I was correct".

Larry Kudlow, President Donald Trump's top economic adviser, and Federal Reserve Chairman Jerome Powell aren't quite on the same page about whether Powell and the president will meet to discuss interest rates.

Speaking to economists in Atlanta on January 4, Powell raised the possibility of a pause in the Fed's interest-rate hiking campaign and an adjustment in its balance sheet reduction plans in response to the downside risks that investors perceive to the economy.

"Investors are breathing a sigh of relief right now", Sam Stovall, chief investment strategist at CFRA Research, told CNN.

There had been concerns the economy was set for a sharp slowdown following surveys that indicated a steep decline in consumer confidence and activity last month.

But Powell struck a more cautious stance on Friday about future moves.

Fed Unity That view was bolstered by the release just hours before of a blockbuster jobs report for December, and was backed by Powell's two predecessors - Janet Yellen and Ben Bernanke - who appeared together with him in Atlanta in a rare show of public unity.

Nonfarm payrolls rose by 312,000 in December, surpassing analyst forecasts. The unemployment rate inched up from a five-decade low to 3.9% as more people entered the labor market to find work. And paychecks grew a better-than-expected 3.2% from a year ago as employers raised wages to attract new workers.

The December job report also indicated that unemployment rate was up 0.2 percentage point month-on-month to 3.9 percent, and that average hourly earnings for all employees on private nonfarm payrolls rose 11 cents, or 0.4 percent over November, to 27.48 USA dollars.

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