NewsColony
Image default
News

Dow rallies 570 points in big turnaround, Nasdaq ends wild day 1.6% higher

U.S. stocks roared back from a sharp sell-off on Friday as a rally in bond yields eased, while a stronger-than-expected jobs report boosted optimism for a faster economic reopening.

The S&P 500 last traded up 1.9% after shedding 1% earlier in the wild session. The Dow Jones Industrial Average climbed 600 points after losing as much as 150 points. The Nasdaq Composite gained 1.4% in the volatile session as Apple climbed 3.1% and Microsoft gained 2.7%. At its low of the day, the tech-heavy benchmark dropped 2.6%.

The major averages bounced off their lows as bond yields retreated from their session highs. The 10-year Treasury yield eased back to 1.56% after popping above 1.6% to touch a 2021 high following data showing a surge in jobs growth.

“Yields ticked down from the move earlier, and that helped underpin the market’s climb higher,” said Quincy Krosby, Prudential Financial’s chief market strategist. “As tech names were moving into correction territory, by most measures the tech sell-off had reached oversold levels and were due for investors and traders to begin buying.”

The Labor Department on Friday reported that nonfarm payrolls jumped by 379,000 for the month and the unemployment rate fell to 6.2%. That compared to expectations of 210,000 new jobs and the unemployment rate to hold steady from the 6.3% rate in January, according to Dow Jones.

Stocks that would benefit from a rapid economic comeback jumped in the wake of the jobs report. The S&P 500 energy sector rose more than 3% as Occidental Petroleum gained nearly 6%. Financials and industrials rallied more than 1% each, while materials jumped 2%.

“Today’s employment report confirmed an economy poised for a broader reopening,” said Gregory Faranello, head of U.S. rates trading at AmeriVet Securities. “The quick selloff in US 10-year rates following today’s employment report was met with good buying around the 1.60% level, lending support to equity and credit markets throughout the day.”

Still, the spike in interest rates fueled fears that growth-oriented tech companies, which had led the market rally last year, may have a hard time living up to expectations if borrowing costs jump. Tesla tumbled more than 4%, bringing its weekly losses to 12%. Pandemic winners Peloton and Zoom Video have slid 19% and 14%, respectively, this week. Red-hot investor Cathie Wood, who focuses on innovative companies, saw her flagship fund lose double digits this week and wipe out its 2021 gains.

The tech-heavy Nasdaq has fallen more than 3% this week and briefly turned negative on the year.

Friday’s moves followed a steep sell-off on Thursday triggered by Federal Reserve Chair Jerome Powell’s remarks on rising bond yields. The Fed chair said the recent runup caught his attention but he didn’t give any indication of how the central bank would rein it in. Some investors had expected Powell to signal his willingness to adjust the Fed’s asset purchase program.

The economic reopening could “create some upward pressure on prices,” Powell said in a Wall Street Journal webinar Thursday. Even if the economy sees “transitory increases in inflation … I expect that we will be patient,” he added.

— CNBC’s Maggie Fitzgerald contributed reporting

Source: Cnbc

Related posts

Dominic Raab accuses the EU of ‘double standards’ ahead of crunch talks

NewsColony

Visit St Ives: Britain’s jolliest town has sparkling bays and divine restaurants

NewsColony

NRA agrees to $2.5 million fine, five-year ban on selling insurance in New York

NewsColony

Leave a Comment