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 The three major indexes clawed back losses of more than 1.5 percent
as poor payroll data hinted at economic weakness while strengthening
the argument for delaying a long-awaited interest rate hike.
The recently beaten-down S&P energy index <.SPNY> surged 4.01
percent following a rise in oil prices, while the materials index <.SPLRCM>
jumped 2.41 percent.
"The silver lining with this disappointing jobs number is that
possibly this could push the rate hike off to the first quarter of
2016," said Jake Dollarhide, chief executive of Longbow Asset
Management in Tulsa.
Friday's strong performance follows over a month of turbulence in
global markets that has seen the S&P lose 7 percent of its value
over fears that troubles in China's economy could spread around the
world.
Now, with the third-quarter earnings season starting next week,
investors are starting to factor in what might be the biggest
decline in profits for S&P 500 companies in six years.
Analysts on average expect third-quarter earnings to decline 4.2
percent, according to Thomson Reuters data.
"There are a lot of concerns that a weakening global economy may be
impacting the U.S., so that certainly doesn't bode well for
earnings," said Peter Cardillo, chief market economist at Rockwell
Global Capital in New York.
"It's going to be a market where we're going to see more and more
volatility and major support levels being tested," Cardillo said.
Non-farm payrolls rose by 142,000, far below the 203,000 economists
had expected, and August and July figures were revised down. But the
jobless rate held at 5.1 percent.
The report, the last before the Federal Reserve's meeting at the end
of October, appeared to contradict Fed Chair Janet Yellen's comment
last week that the economy was strong enough to withstand a rate
hike this year.
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Odds of a December rate hike fell to a little over 27 percent from
44 percent before the report.
Following a steep selloff since late August, the S&P 500 is trading
at 15.1 times expected earnings, slightly below the long-term median
of 15.6.
The Dow Jones industrial average <.DJI> rose rallied 1.23 percent to
end at 16,472.37 points.
The S&P 500 <.SPX> gained 1.43 percent to 1,951.36. It bounced about
3 percent from its intra-day low to its closing level.
The Nasdaq Composite <.IXIC> jumped 1.74 percent to finish at
4,707.78.
For the week, the Dow and S&P both rose 1 percent. The Nasdaq added
0.5 percent.
Of the 10 major sectors, only the financial index <.SPSY> failed to
advance on Friday.
Chevron <CVX.N> rose 4.10 percent and ConocoPhillips <COP.N> jumped
2.12 percent. Alcoa <AA.N> jumped 2.81 percent.
About 8.3 billion shares changed hands on U.S. exchanges, above the
7.25 billion average for the previous 20 sessions, according to
Thomson Reuters data.
NYSE advancing issues outnumbered decliners 2,321 to 753. On the
Nasdaq, 1,930 issues rose and 882 fell.
The S&P 500 index showed four new 52-week highs and 56 lows, while
the Nasdaq recorded 13 new highs and 189 lows.
(Additional reporting by Charles Mikolajczak, Tanya Agrawal, and
Abhiram Nandakumar; Editing by Nick Zieminski)
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