The news shot government bond prices up, drove the dollar down and rattled stock markets in Europe.
The report, the <strong>laststrong> before the Fed’s <strong>meetingstrong> at the end of October, appeared to belie <strong>Fedstrong> Chair Janet Yellen’s comment <strong>laststrong> week that the USA <strong>economystrong> was strong enough to withstand a <strong>rate hikestrong> this <strong>yearstrong>.
Wall Street stocks finished solidly higher despite a report showing the United States added just 142,000 jobs in September, well below expectations. The unemployment rate stayed at 5.1 percent, but only because many Americans have stopped looking for work and are no longer counted as unemployed. “Combined with other reports, it really raises questions about the strength of the recovery”.
Major indexes fell hard at the opening of trading, with the Dow Jones industrial average losing as much as 258 points, then reversed course and charged higher throughout the afternoon.
At the closing bell on Friday, the Dow Jones Industrial Average was at 16,472.77, up 200.76 points (1.23 per cent).
US-listed Chinese stocks rallied, including Internet giant Alibaba (+7.4 percent), Internet search company Baidu (+8.0 percent) and the online electronics retailer JD.com (+9.1 percent).
Market participants are now pricing in only a 30% chance for a rate increase in December, according to Fed-funds futures. Low interest rates reduce the profits banks can make from lending money.
The Dow rose 157.70 points, or 1 per cent.
The Nasdaq rose 21.28 points, or 0.5 per cent. JPMorgan Chase fell $1.45, or 2 percent, to $59.54, and Bank of America fell 52 cents, or 3 percent, to $15.02.
The S&P 500 index is down 107.54 points, or 5.2 per cent.
The jobs report, seen as the closest proxy for the health of the US economy, comes at a time when financial markets have been reeling on heightened worries about global economic growth, led by China.
Back in the USA, Nordstrom’s stock climbed after announcing that it will pay a special dividend and spend up to $1 billion buying its own shares. The department-store chain gained $1.35, or 2 percent, to $72.76.
BONDS AND DOLLARS: US government bond prices jumped, driving the yield on the 10-year down to 1.96 percent, its lowest level since April and a steep drop from 2.04 percent late Thursday. The euro rose 0.3 percent to $1.1222 and the dollar slipped to 119.82 yen. Still, the precious metal was 0.8% lower on the week. Gold jumped $22.90, or 2 percent, to $1,136.60 an ounce, and silver soared 75 cents, or 5 percent, to $15.26 an ounce.