Strong jobs outlook gives boost to stocks
NEW YORK -- A see-saw start to the stock market ended with a rally Friday, as traders bet that robust hiring would boost the economy.
After the government reported strong hiring for June, traders and investors struggled over how to react. At first, they pushed stocks higher because the report was better than expected. Then they pushed stocks lower because the improving jobs market made it more likely the Federal Reserve would scale back its economic stimulus.
After waffling early, investors finally settled on an optimistic outlook.
"In general, I think our economy is standing on its own two feet right now," said David Brown, chief market strategist at Sabrient, a Santa Barbara, Calif., research firm for institutional investors.
U.S. stock indexes shot higher when the market opened, fueled by the Labor Department's report that the U.S. economy added a stronger-than-expected 195,000 jobs last month. The Dow Jones industrial average jumped as much as 115 points.
But the gains then tapered off within the hour, and all the major indexes dipped briefly into the red. But by the end of the day they had more than recovered, and all the major indexes ended about 1 percent higher.
The Dow Jones industrial average rose 147.29 points to 15,135.84. The Standard & Poor's 500 rose 16.48 points to 1,631.89. The Nasdaq composite climbed 35.71 to 3,479.38.
"I think the initial reaction was, 'Yay, all these people are employed, and then, 'whoops,"' Brown said, during late-morning trading.
The whiplash day illustrated the complex and outsized role that the Fed has played on stock market results in recent weeks.