Stocks staged a big comeback into the green after the jobs report which showed that employment and wage growth were weaker than expected in September.
After first tanking in premarket trading, with Dow futures shedding as many as 200 points, stocks rallied through the trading day and earned a positive close for the week.
First, the scoreboard:
- Dow: 16,472.64, +200.63, (1.23%)
- S&P 500: 1,951.35, +27.53, (1.43%)
- Nasdaq: 4,707.77, +80.69, (1.74%)
And now, the top stories on Friday:
- The jobs report was weak all around. The US economy added 142,000 jobs in September, according to the Department of Labour, fewer that the 200,000 jobs economists expected. Payroll gains during August were also revised downwards, to 136,000 from 173,000, making it the second-worst month of the year. The unemployment rate was unchanged at a seven-year low of 5.1%. Wages disappointed, with average hourly earnings flat during the month (0.2% expected), and rising 2.2% year-on-year (2.4% estimated). The labour force participation rate fell to 62.4%, the lowest since October 1977.
- After the jobs report, traders slashed their odds that the Federal Reserve will raise interest rates this year. BNP Paribas economists pushed their forecast of the first rate hike to next March. “We are reassessing our Fed call for December at the moment,” wrote Chris Rupkey at Bank of Tokyo-Mitsubishi in a client note. “The idea the U.S. economy could power forward while the rest of the world is stalling out, that idea can be put in the garage bin. The biggest engine for world growth looks to be sputtering here, and interest rates are unlikely to be the first in the world to come off of the zero bound.”
- “People are waking up to the idea that global growth is not what they thought it was,” said DoublelineCapital’s Jeff Gundlach in an interview with Reuters. “The reason the markets aren’t going lower is people are holding and hoping.”
- The US oil rig count is back in free fall. Data from driller Baker Hughes showed that the number of oil rigs in use fell by 26 to 614, the lowest since the tally topped out last October, before plunging with oil prices. It was the lowest oil rig count since the week ending August 6, 2010, and the biggest drop in a week since the week of April 24, 2015.