Stocks soared in mid-morning trading Friday, following inflation-friendly unemployment and factories orders reports, reported Foxnews.com Friday.
At 10:40 a.m (US time), the Dow jumped 167 points, or 1.5 percent, to 10,819 and the Nasdaq climbed 195 points, or 5.5 percent, to 3777.
The news service said that in the most telling sign yet that the Federal Reserve's hikes in interest rates is cooling the red-hot economy, the unemployment rate jumped back to 4.1 percent in May as American businesses lost 116,000 jobs, the worst showing in nearly nine years.
The unemployment rate came in above the 3.9 percent expected.
In a separate report, April's factories orders fell 4.3 percent, the sharpest drop since 1990, due to lessening demands in electronics. April's decline is compared to the 2.7 percent March increase.
"I think that those are extremely positive numbers for the market," said Thom Brown, managing director of Rutherford Brown and Catherwood. "You're going to see a big rally here this morning just based on those numbers, and that rally should carry through for a while."
According to Fox News, investors took courage from the May jobs and April factories orders data that suggested the Fed's six interest rate increases since last June have succeeded in easing wage pressures - a key central bank concern. The rally was broad-based and the momentum pulled in many traders who had been sitting on the sidelines during the past couple of weeks. The volume in both indices was strong. All sectors traded up in the Nasdaq, with telecoms leading the charge.
In the Dow, advancers led decliners by a 7 to 2 margin. Some Old Economy stocks, however, such as Exxon Mobile and Johnson & Johnson, showed weakness.
The bond market also reacted positively to the news, shooting up as traders began to take out the expectation that the Fed has to aggressively raise interest rates in the coming months.
"I think the Fed can take the month of June off," said Arthur Hogan, chief market analyst at Jefferies & Co. "We're going higher."
Softer-than-expected economic reports in recent weeks, including retail sales, durable goods, new home sales and an easing in the National Association of Purchasing Management's (NAPM) business conditions index have raised hopes that the Fed's is nearing the end of its rate increase campaign.
Federal Reserve officials speaking after the market closed on Thursday provided few clues on their potential next moves in regards to monetary policy.
Federal Reserve Board governor Edward Gramlich said that it was too early to gauge the impact which the US central bank's rate hikes over the past year have had on the economy.
But Federal Reserve Bank of Richmond President Alfred Broaddus said he saw significant imbalances in the US economy and warned that inflation might be moving to a higher trend. Broaddus is a voting member this year on the rate-setting Federal Open Market Committee.
On Thursday, the Nasdaq composite ended at a session high, up 181.59 points, or 5.34 percent, at 3,582.50, erasing Wednesday's 58-point loss. It was the first close above 3,500 since May 18 for the technology-laced Nasdaq. Top technology names spiked up on bullish comments from analysts and corporate developments.
Tech strength boosted the Dow Jones industrial average by 129.87 points, or 1.23 percent, to 10,652.20, despite weakness in energy and oil stocks. Hewlett-Packard was the clear Dow leader, up 14-13/16 at 134-15/16 after impressing analysts and winning strong praise from Wall Street.
Broader measures of the market also gained ground. The Standard & Poor's 500 index climbed 28.21 points, or 1.99 percent, to 1,448.81 while the Wilshire 5000 index, a gauge of nearly the entire US equity market, gained 315.15 points, or 2.41 percent, to 13,368.11.
Bond prices soared. The 10-year US Treasury note gained 1-8/32, with the yield dropping to 6.02 from Thursday's close of 6.19 percent. The 30-year bond shot up 1-16/32, with the yield falling to 5.84 percent from Thursday's close of 5.94 percent.
Among the stocks in the news overnight, Gillette Co., the consumer products company best known for its shaving products, said on Thursday it was discussing a sale of its sagging stationery division to Newell Rubbermaid Inc.. Gillette closed at 34-3/8 while Newell Rubbermaid closed at 26-3/4, both ahead of the news.
Continental Airlines Inc. said on Thursday its May load factor was 75.9 percent, 3.3 points above the year-earlier period. It closed at 44-5/16 ahead of the news.
Unilever NV/Plc said on Friday it had no fresh talks with Bestfoods amid reports it had increased its bid for the US food group, but a spokesman did not rule out informal "conversations" having taken place. Bestfoods closed at 65-7/8.
The Federal Communications Commission is poised to approve AT&T Corp.'s $58 billion pending buy of MediaOne Group Inc. , but with divestiture of some cable television properties, the Wall Street Journal reported. AT&T closed at 34-15/16 while MediaOne closed at 67-9/16 – Albawaba.com
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