NEW YORK: Wall Street stocks moved solidly higher in mid-morning trading Friday after a mixed US jobs report was seen as reducing the odds of faster Federal Reserve interest rate hikes.
US stocks had opened little changed, but gained soon after that, with the Dow Jones Industrial Average up 0.9 percent at 24,132.41 at 1450 GMT.
The broad-based S&P 500 rose 0.7 percent to 2,647.66, while the tech-rich Nasdaq advanced 1.0 percent to 7,160.61.
The US economy added 164,000 jobs in April, which was below expectations. But the unemployment rate fell to 3.9 percent, the lowest since December 2000.
Related Post
Employers nationwide have said the pool of available workers is drying up, although the report showed only modest growth in wages.
Several analysts said the report, while disappointing in some respects, was solid enough to keep the Federal Reserve on track to lift interest rates next month.
But the market’s reaction suggested it lowered the odds of more aggressive Fed action.
“For now traders are happy that this takes the pressure off the Fed,” said Chris Low of FTN Financial.
“The market has concluded that weaker- than-expected hiring and more importantly weaker-than-expected wage growth adds up to a benign report from the Fed’s perspective,” Low said.
That comes after the Fed on Wednesday signaled it would be comfortable with inflation rising a little above its “symmetric” target of two percent.
However, Low said the Fed may not read the jobs report the same way as investors.
“They’ll probably see weakness in hiring as a sign in a shortage of workers rather than an actual slowdown.”
Among individual companies, Apple surged 3.4 percent after Warren Buffett’s Berkshire Hathaway bought an additional 75 million shares of the technology giant.
Tesla Motors gained 1.2 percent after chief executive Elon Musk said on Twitter that sharp questioning by equity analysts on a Wednesday conference call came from those allied with investors who bet against Tesla shares. But Musk also said it was “foolish” not to respond to the questions.
Tesla shares had fallen sharply on Thursday after Musk was criticized for cutting off and belittling analysts who pressed for more details on company finances. The two analysts who were cut off have a “hold” recommendation on Tesla shares.
Source: Brecorder
