U.S. Stocks Move Sharply Higher Following ‘Goldilocks’ Jobs Report

Stocks have moved sharply higher in morning trading on Friday, extending the substantial rebound from early lows seen in the previous session. The major averages have all shown strong moves to the upside after ending Thursday’s trading mixed.

In recent trading, the major averages have reached new highs for the session. The Dow is up 323.03 points or 1 percent at 31,979.45, the Nasdaq is up 149.83 points or 1.3 percent at 11,934.95 and the S&P 500 is up 49.29 points or 1.2 percent at 4,016.14.

The rally on Wall Street comes following the release of a closely watched Labor Department report showing U.S. employment increased roughly in line with economist estimates in the month of August.

The report showed non-farm payroll employment rose by 315,000 jobs in August after surging by a revised 526,000 jobs in July.

Economists had expected employment to increase by about 300,000 jobs compared to the jump of 528,000 jobs originally reported for the previous month.

Meanwhile, the Labor Department said the unemployment rate edged up to 3.7 percent in August from 3.5 percent in July. Economists had expected the unemployment rate to remain unchanged.

The unexpected uptick by the unemployment rate came as the labor force increased by 786,000 persons, more than outpacing the 442,000-person growth in the household measure of employment.

Amid recent concerns about the outlook for interest rates, the jobs data was described as a “goldilocks” report by some economists, coming in neither too hot nor too cold.

“The August employment report paints a very positive picture regarding the current state of the US economy with solid jobs growth yet signs that supply strains are easing as workers return to the labor force,” said ING Chief International Economist James Knightley

He added, “With wage growth coming in lower than expected it points to a slower pace of rate hikes after September’s expected 75 basis point move.”

Stocks saw further upside following the release of a report from the Commerce Department showing an unexpected pullback in U.S. factory orders.

While the report points to a slowdown in U.S. manufacturing, traders seem optimistic the data could lead the Fed to pull back on its aggressive interest rate strategy.

Energy stocks are showing significant strength following recent weakness, rebounding along with the price of crude oil. Crude for October delivery is currently jumping $2.38 to $88.99 a barrel.

Reflecting the strength in the energy sector, the Philadelphia Oil Service Index is up by 4.9 percent and the NYSE Arca Oil Index is up by 3.1 percent.

Considerable strength is also visible among gold stocks, as reflected by the 4.3 percent spike by the NYSE Arca Gold Bugs Index. The index is bouncing off its lowest closing level in well over two years.

The rebound by gold stocks comes amid a bounceback by the price of the precious metal, with gold for December delivery climbing $16.40 to $1,725.70 an ounce.

Steel, semiconductor and banking stocks are also seeing significant strength on the day, moving higher along with most of the other major sectors.

In overseas trading, stock markets across the Asia-Pacific region moved mostly lower during trading on Friday. Japan’s Nikkei 225 Index closed just below the unchanged line, while Hong Kong’s Hang Seng Index slid by 0.7 percent.

Meanwhile, the major European markets have shown substantial moves to the upside on the day. While the German DAX Index has soared by 2.8 percent, the French CAC 40 Index is up by 2.2 percent and the U.K.’s FTSE 100 Index is up by 1.7 percent.

In the bond market, treasuries are regaining ground following the sell-off seen in the previous session. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 6 basis points at 3.205 percent.