U.S. Stocks Finish Volatile Session Sharply Higher After Jobs Report

Stocks saw significant volatility during trading on Friday before eventually ending the session sharply higher. With the strong upward move, the major averages regained ground after closing lower for four straight sessions.

The major averages all posted strong gains on the day. The Dow jumped 401.97 points or 1.3 percent to 32,403.22, the Nasdaq surged 132.31 points or 1.3 percent to 10,475.25 and the S&P 500 shot up 50.66 points or 1.4 percent to 3,770.55.

Despite the rebound on the day, the major averages all moved notably lower for the week. The Dow slumped by 1.4 percent, the S&P 500 tumbled by 3.4 percent and the Nasdaq plunged by 5.7 percent.

The volatility on the day came following the release of the Labor Department’s closely watched monthly employment report for October.

The report showed non-farm payroll employment jumped by 261,000 jobs in October after surging by an upwardly revised 315,000 jobs in September.

Economists had expected employment to climb by about 200,000 jobs compared to the addition of 263,000 jobs originally reported for the previous month.

Meanwhile, the Labor Department said the unemployment rate rose to 3.7 percent in October from 3.5 percent in September. The unemployment rate was expected to inch up to 3.6 percent.

The report generated a mixed reaction among traders, creating uncertainty about the outlook for future interest rate hikes.

Sector News

Gold stocks skyrocketed on the day, resulting in a 10.3 percent surge by the NYSE Arca Gold Bugs Index. The index bounced off its lowest closing level in a month.

The rally by gold stocks came amid a sharp increase by the price of the precious metal, with gold for December delivery soaring $45.70 to $1,676.60 an ounce.

Substantial strength was also visible among steel stocks, as reflected by the 7.8 percent spike by the NYSE Arca Steel Index. With the jump, the index reached a two-month closing high.

Computer hardware stocks also saw considerable strength on the day, driving the NYSE Arca Computer Hardware Index up by 4.0 percent.

Semiconductor, chemical and banking stocks also showed strong moves to the upside, while telecom and networking stocks saw notable weakness.

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 slumped by 1.7 percent, while China’s Shanghai Composite Index surged by 2.4 percent.

Meanwhile, the major European markets also showed substantial moves to the upside on the day. While the French CAC 40 Index spiked by 2.8 percent, the German DAX Index shot up by 2.5 percent and the U.K.’s FTSE 100 Index jumped by 2.0 percent.

In the bond market, treasuries fluctuated over the course of the session before closing in negative territory. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, rose by 3.2 basis points to 4.156 percent.

Looking Ahead

A report on consumer price inflation is likely to be in focus next week, as traders look for additional clues about the outlook for interest rates.

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