Stocks rally following monthly nonfarm payrolls report.
The U.S. stock market rallied on Friday, underpinned by solid nonfarm payrolls data that showed unemployment fell to its lowest level in 50 years.
All of Wall Street’s major indices reported gains on Friday. The Dow Jones Industrial Average (NYSEARCA:DIA) surged 289.46, or 1.1%, to 26,490.50.
The broad S&P 500 Index (NYSEARCA:SPY) climbed 1.1% to 2,942.57. Most of the major sectors reported gains, led by by information technology. Financials, utilities and healthcare also outperformed the benchmark average.
Meanwhile, the technology-focused Nasdaq Composite Index (NYSEARCA:QQQ) advanced 1.1% to 7,961.77.
A measure of implied volatility known as the CBOE VIX (NYSEARCA:VXX) declined sharply on Friday, as calm returned to Wall Street after a rocky week. The so-called “fear index” touched an intraday low of 17.56 on a scale of 1-100 where 20 represents the historic average. VIX last traded at 17.62, having declined 7.9%.
In economic data, U.S. nonfarm payrolls rose less than expected in September, though unemployment fell to its lowest levels in over five decades, painting a mixed picture of the labor market.
Employers added 136,000 workers to payrolls last month versus expectations of 168,000, the Department of Commerce reported Friday. The August hiring rate was upwardly revised to 168,000.
Unemployed fell to 3.5% from 3.7% previously.
Average hourly earnings were the biggest weak spot, failing to grow in September. Compared with 12 months earlier, earnings rose 2.9%.
The Final Word: A firming labor market likely puts to rest fears of an imminent recession, but the sharp slowdown in job creation remains a concern. The U.S. economy is adding far fewer jobs than at any point in the post-crisis recovery.