Video of Jobs data drives stocks higher
Traders and financial professionals work on the floor of the New York Stock Exchange, Oct 3, 2019.
NEW YORK (AFP) — Wall Street stocks finished a volatile week solidly higher on Friday (Oct 4) following US jobs data that eased recession fears even as investors continued to expect more Federal Reserve interest rate cuts.
The report said the US added 136,000 jobs in September, while the unemployment rate fell to 3.5 per cent, a 50-year low. But the pace of job creation slowed and wages fell.
«The headlines will blast the news that the unemployment rate hit a 50-year low. But it is still all about consumer spending and today’s employment report did not do much to create hope that households will be able to keep supporting the economy,» economist Joel Naroff said in an analysis.
«Wage gains are faltering and if that continues, households will just not have the means to shop ’till they’re tired, let alone ’till they drop.»
The Dow Jones Industrial Average finished at 26,571.99, up 1.4 per cent.
The broad-based S&P 500 also gained 1.4 per cent to close at 2,951.90, along with the tech-rich Nasdaq Composite Index, which finished at 7,982.48.
The Dow and S&P 500 finished an unsettling week modestly lower, while the Nasdaq eked out a gain.
The jobs data came on the heels of weak reports on the manufacturing and services sectors that had amplified worries over the US economy.
Analysts said the jobs data was strong enough to mitigate talk of a possible recession but likely not good enough to deter the Federal Reserve from cutting interest rates again as soon as this month.
«I think that there is enough uncertainty and we had enough comments from Fed governors today that suggested that they don’t want to wait until the last minute if there’s a problem,» said Maris Ogg of Tower Bridge Advisors.
«We’ll probably get that cut in October.»
The Fed has cut the benchmark lending rate twice this year, and its policy committee is due to meet again Oct 29-30.
Among individual companies, Apple rose 2.8 per cent after a Nikkei report said the company boosted production of new iPhones in response to unexpectedly strong demand for new models.
HP plunged 9.6 per cent after unveiling plans to cut more than 10 per cent of its global workforce, which would mean up to 9,000 jobs. The company said that the reorganisation would save about US$1 billion (S$1.3 billion) annually by the end of fiscal 2022.