Stocks, Bond Yields Climb on Strong Jobs Report
By Avantika Chilkoti and Alexander Osipovich
U.S. stocks and government-bond yields rose on Friday after a
surprisingly upbeat monthly jobs report signaled strength in the
U.S. economy, offsetting some of the jitters about trade that
rattled investors earlier this week.
The Dow Jones Industrial Average advanced 279 points, or 1%, to
27971 in morning trading. The S&P 500 and the Nasdaq Composite
both climbed 0.9%.
Employers added 266,000 jobs in November and unemployment
matched a 50-year low of 3.5%, signs the U.S. economy is
withstanding a global slowdown. Those numbers beat the projections
of economists surveyed by The Wall Street Journal who estimated
nonfarm payrolls increased by 187,000 and the unemployment rate
remained at 3.6%.
Haven assets like gold and Treasurys slid, pushing the yield on
the benchmark 10-year U.S. Treasury note up to 1.837% from 1.791%
before the report and sending most-active gold futures down
"It's a very solid jobs report," said Michael Arone, chief
investment strategist at State Street Global Advisors. "Since
August you have seen recession fears recede, and this report
continues to show that the U.S. economy is on a firm footing."
Household spending has proved to be crucial this year for U.S.
economic growth, though the Federal Reserve has also cut rates
three times to help bolster output amid rising fears of a global
"All that's keeping it together from the U.S. perspective at the
moment is the consumer," said James Athey, investment analyst at
Aberdeen Standard Investments. Weak employment figures would have
had knock-on effects for confidence and spending, he said ahead of
the jobs data.
The report suggests that the Fed will keep interest rates on
hold for the foreseeable future, analysts said. The key
rate-setting committee of the U.S. central bank is set to meet next
week, but Fed watchers expect it to keep rates steady in light of
the positive economic data and its cuts earlier this year.
U.S.-China trade talks also remain in the spotlight for markets
ahead of the Dec. 15 deadline for new tariffs on consumer goods to
At the end of a week that has seen markets react to conflicting
signals on the progress of negotiations, China's State Council on
Friday began the process of exempting some soybeans and pork
imported from the U.S. from punitive tariffs, the state-run Xinhua
News Agency said.
"I don't think there will be anything signed by the 15th, but
they may well kick it into next year," said Tom Roderick, a
portfolio manager at London-based hedge fund Trium Capital, adding
that "both sides are playing nice at the moment" with little
incentive to escalate tariffs.
Despite a rough start to December, major U.S. stock indexes are
trading just below their records from late last month. Friday's
rally put the S&P 500 on track for a modest weekly gain. The
Dow industrials and Nasdaq Composite are still in the red for the
President Trump lauded the stock market's 2019 rally just before
the jobs report, saying on Twitter, "Stock Markets Up Record
Numbers. For this year alone, Dow up 18.65%, S&P up 24.36%,
Nasdaq Composite up 29.17%. 'It's the economy, stupid.'"
In commodities, U.S. crude oil futures rose 1.7% after Saudi
Arabia and other large oil-exporting countries signaled that they
would cut production.
Overseas, the benchmark Stoxx Europe 600 index was up 1.1%. In
Asia, the Shanghai Composite Index closed up 0.4%, while the Hang
Seng rallied 1.1%.
U.K. markets remained volatile ahead of a general election next
week. The FTSE 100 rallied 1.2% on Friday, lifted by the U.S. jobs
data and speculation that Prime Minister Boris Johnson's
Conservative Party will come out on top in the vote. Such an
outcome would reduce uncertainty around the U.K.'s withdrawal from
the European Union.
"The way the polls look at the moment, it's not going to be a
narrow majority open to hostage-taking," said Mr. Roderick.
The pound dropped 0.2% against the dollar.
Write to Avantika Chilkoti at Avantika.Chilkoti@wsj.com and
Alexander Osipovich at firstname.lastname@example.org
(END) Dow Jones Newswires
December 06, 2019 10:29 ET (15:29 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.
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