U.S. Stocks Ride Roller-Coaster To Sharply Higher Close

Stocks went on a roller-coaster ride during the trading session on Friday before ending the day sharply higher. With the strong upward move on the day, the major averages partly offset the steep drop seen over the three previous sessions.

The tech-heavy Nasdaq tumbled to its lowest intraday level in nearly three months before rebounding to end the day up 196.68 points or 1.6 percent at 12,920.15. The Dow also jumped 572.16 points or 1.9 percent to 31,496.30 and the S&P 500 surged up 73.47 points or 2 percent to 3,841.94.

For the first week of March, the major averages turned in a starkly mixed performance. While the Nasdaq tumbled by 2.1 percent, the Dow shot up by 1.8 percent and the S&P 500 climbed by 0.8 percent.

The wild ride on Wall Street came as traders continued to keep a close eye on activity in the bond markets following the recent increase in yields.

Yields spiked early in the session following the release of upbeat jobs data, contributing to a continued sell-off by stocks in morning trading.

However, bond yields gave back ground over the course of the session, with the yield on the benchmark ten-year note ending the day nearly flat after reaching a more than one-year high above 1.6 percent.

The pullback by yields inspired traders to pick up stocks at relatively reduced levels following the weakness seen in recent sessions.

The volatility in the markets followed the release of the Labor Department’s closely watched monthly jobs report, which showed much stronger than expected job growth in the month of February.

The Labor Department said non-farm payroll employment jumped by 379,000 jobs in February after climbing by an upwardly revised 166,000 jobs in January.

Economists had expected employment to increase by 182,000 jobs compared to the uptick of 49,000 jobs originally reported for the previous month.

The stronger than expected job growth was primarily due to a rebound in employment in the leisure and hospitality industry, which added 355,000 jobs.

The report also said the unemployment rate unexpectedly edged down to 6.2 percent in February from 6.3 percent in January. Economists had expected the unemployment rate to remain unchanged.

The modest decrease pulled the unemployment rate down to its lowest level since hitting 4.4 percent last March, when coronavirus-related lockdowns began to take effect.

Sector News

Energy stocks showed a substantial move to the upside, as the price of crude oil continued to spike after OPEC and its allies agreed to extend production cuts.

After soaring $2.55 to $63.83 a barrel on Thursday, crude for April delivery surged up $2.26 to $66.09 a barrel, its highest closing level in over a year.

Reflecting the strength in the energy sector, the Philadelphia Oil Service Index skyrocketed by 6.6 percent and the NYSE Arca Oil Index shot up by 4 percent.

Significant strength also emerged among housing stocks, as reflected by the 4 percent jump by the Philadelphia Housing Sector Index.

Steel, telecom and semiconductor stocks also saw considerable strength on the day, moving notably higher along with most of the other major sectors.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved mostly lower during trading on Friday. Japan’s Nikkei 225 Index dipped by 0.2 percent, while Hong Kong’s Hang Seng Index fell by 0.5 percent.

The major European markets also moved to the downside on the day. While the U.K.’s FTSE 100 Index slipped by 0.3 percent, the French CAC 40 Index slid by 0.8 percent and the German DAX Index slumped by 1 percent.

In the bond market, treasuries rebounded after seeing early weakness, ending the day nearly unchanged. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, edged down by less than a basis point to 1.554 percent.

Looking Ahead

In light of recent concerns about inflation, next week’s trading may be impacted by reaction to reports on consumer and producer prices in the month of February.