Market Snapshot: Dow turns higher, as U.S. stocks rise in choppy trade after strong January jobs report

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All three major U.S. stock benchmarks were rising Friday afternoon, after choppy trade, as investors digested a much stronger-than-expected January jobs report that underlined expectations for an aggressive round of rate increases by the Federal Reserve.

The Nasdaq Composite was buoyed by strong results from Amazon.com Inc., a day after earnings and a warning from Facebook parent Meta Platforms sent its shares of the social-media platform tumbling and dragged the broader market lower.

How are stock benchmarks trading?
  • The Dow Jones Industrial Average DJIA, +0.08% rose 44 points, or 0.1%, to about 35,156.
  • The S&P 500 SPX, +0.75% gained 33 points, or 0.7%, to about 4,510, after flipping between modest gains and losses in morning action.
  • The Nasdaq Composite COMP, +1.73% climbed 226 points, or 1.6%, to about 14,105.

On Thursday, the Dow slumped more than 500 points, or 1.5%, the S&P 500 dropped 2.4% and the Nasdaq Composite tumbled 3.7%.

What’s driving the market?

Stock indexes rose Friday afternoon, with the Dow Jones Industrial Average flipping into positive territory, after the government reported Friday that the U.S. economy added 467,000 jobs in January and hiring was much stronger at the end of 2021 than originally estimated.

The unemployment rate ticked up to 4% from 3.9%, while the percentage of people in the labor force ticked up to a pandemic high of 62.2%.

“We got a lot of jobs, which is fantastic news,” said Tim Courtney, chief investment officer of Exencial Wealth Advisors, in a phone interview Friday. And “it looks like we’ve got some additional people entering the workforce.”

Economists surveyed by The Wall Street Journal had forecast a payrolls rise of just 150,000 — and some had warned that a fall was possible due to hourly workers without paid sick leave being counted as without jobs. Analysts said investors had been prepared to look through a weak number, on expectations for a sharp reversal in February.

The strong January reading served to reinforce expectations the Federal Reserve will be aggressive in lifting interest rates and taking other steps to pullback on monetary stimulus as it attempts to rein in the highest inflation in decades.

“The party is kind of ending on the rate side,” said Courtney. The economy seems to have enough momentum to keep growth “strong” even if it slows from 2021.

The unexpectedly strong report means that “fears of the Fed being forced to act more urgently could come back to the fore and be a headwind for equities,” said Matt Peron, director of research at Janus Henderson Investors, in emailed comments. “Our fears that the first half of 2022 would be ‘choppy’ for markets are still holding and we are not out of the woods yet.”

Fed-funds traders increased bets the Federal Reserve would deliver a 50 basis point increase at its March meeting, rather than the typical move of 25 basis points. The CME FedWatch Tool showed fed-funds futures reflected a 27% chance of a half-point move, up from 14% on Thursday.

Amazon.com shares  AMZN, +15.24%  buoyed the Nasdaq after the e-commerce giant delivered blowout results late Thursday. Some $11.8 billion of the $14.3 billion fourth-quarter profit it reported was from an investment in Rivian Automotive RIVN, +2.29%, which went public in the quarter. The company also raised the cost of a Prime subscription to $139 a year from $119 a year.

Amazon shares were soaring around 14% Friday afternoon, according to FactSet.

Read: Amazon Prime is raising its price: Here’s how much it has gone up over the years

Stocks broke a four-session string of wins on Thursday after Facebook parent Meta Platforms Inc. FB, -0.85% missed sales and growth estimates. Shares slumped a record 29.4% and $232 billion fell off the company’s market value, the largest single-day decline on record for any U.S. company, according to Dow Jones Market Data.

Meta shares were down 1.3% on Friday afternoon, FactSet data show.

Read: Facebook wasn’t Thursday’s only big loser—these 16 other Nasdaq-100 stocks dropped at least 5%

Which companies are in focus?
How are other assets faring?
  • The yield on the 10-year Treasury note  TMUBMUSD10Y, 1.924% surged about 9 basis points to around 1.92%, a level last seen in late 2019. Yields and debt prices move opposite each other.
  • The ICE U.S. Dollar Index  DXY, +0.04%,  a measure of the currency against a basket of six rivals, was little changed.
  • West Texas Intermediate crude for March delivery  CLH22, +2.61% rose 2.8% to trade at $92.75 a barrel. Gold’s GCJ22, +0.23% April futures contract edged up 0.2% to trade at $1,807.80 an ounce.
  • Bitcoin BTCUSD was up 9%.
  • In European equities, the Stoxx Europe 600  SXXP, -1.38% closed 1.4% lower for a weekly decline of 0.7%. London’s FTSE 100 UKX UKX, -0.17% slipped 0.2% Friday but still gained 0.7% for the week.

—Barbara Kollmeyer contributed to this report.

This article was originally published by Marketwatch.com. Read the original article here.

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