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 recovery.
The Dow Jones Industrial Average climbed 572.16 points, or 1.9%, to 31,496.30 after losing as much as 150 points. The S&P 500 ended the wild session 2% higher at 3,841.94 after shedding 1% earlier. The Nasdaq Composite advanced 1.6% to 12,920.15 as Apple climbed 1% and Microsoft gained 2%. At its low of the day, the tech-heavy benchmark dropped 2.6%.
“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 jobless 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 popped 3.9%, posting its best day since November. Occidental Petroleum jumped 4.5%, while Devon Energy rallied 8.4%. Financials and materials rose more than 2% each.
“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.”
Pandemic winners Peloton and Zoom Video slid 12% and 9%, 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.
Despite Friday’s rebound, the Nasdaq fell more than 2% this week, and the tech-heavy benchmark briefly turned negative on the year. The S&P 500 gained 0.8% this week, snapping a two-week losing streak. The blue-chip Dow outperformed with a 1.8% weekly gain as investors bet on the recovery.
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.
Read more at:https://www.cnbc.com/2021/03/04/stock-market-open-to-close-news.html
By: Yun Li