Upbeat Jobs Data, Optimism About Trade Talks With China Sparks Rally On Wall Street

(RTTNews) - Stocks moved sharply higher during trading on Friday, with the major averages reaching their best closing levels in a month. The S&P 500 closed higher for the ninth consecutive session, marking its longest winning streak in over twenty years.

The major averages pulled back off their best levels late in the session but still posted strong gains. The Nasdaq surged 266.99 points or 1.5 percent to 19,977.73, the S&P 500 shot up 82.53 points or 1.5 percent to 5,686.67 and the Dow jumped 564.47 points or 1.4 percent to 41,317.43.

For the week, the tech-heavy Nasdaq soared by 3.4 percent, while the Dow and the S&P 500 spiked by 3.0 percent and 2.9 percent, respectively.

The rally on Wall Street came following the release of a closely watched Labor Department report showing U.S. job growth far exceeded economist estimates in the month of April.

The Labor Department said non-farm payroll employment shot up by 177,000 jobs in April compared to expectations for an increase of about 130,000 jobs.

At the same time, the jumps in employment in February and March were downwardly revised to 102,000 jobs and 185,000 jobs, respectively, reflecting a net downward revision of 58,000 jobs.

The report also said the unemployment rate came in at 4.2 percent in April, unchanged from the previous month and in line with economist estimates.

"Markets breathed a sigh of relief this morning as the jobs data came in better than expected," said Chris Zaccarelli, Chief Investment Officer for Northlight Asset Management. "While recession fears are still simmering on the back burner, the buy-the-dip dynamic can continue - at least until the tariff pause runs out."

Buying interest was also generated in reaction to indications China is open to trade talks with the U.S., with a spokesperson for China's Ministry of Commerce saying U.S. officials have "repeatedly expressed their willingness to negotiate with China on tariffs."

The spokesperson said China is "currently evaluating" messages sent to China through relevant parties hoping to start trade talks.

However, according to a Google translation, the spokesperson said the U.S. has to be prepared to "correct its wrong practices" and cancel unilateral tariffs if it wants to talk and warned failure to do so would show the U.S. has "no sincerity at all and will further damage the mutual trust between the two sides."

The strength on Wall Street came a despite a slump by shares of Apple (AAPL), with the tech giant tumbling by 3.7 percent after reporting its quarterly results after the close of Thursday's trading.

Sector News

Airline stocks turned in some of the market's best performances on the day, with the NYSE Arca Airline Index soaring by 6.0 percent.

Substantial strength was also visible among semiconductor stocks, as reflected by the 3.5 percent surge by the Philadelphia Semiconductor Index. With the jump, the index reached its best closing level in over a month.

Financial, pharmaceutical and software stocks also saw significant strength, while telecom stocks were among the few groups to buck the uptrend.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Friday. Japan's Nikkei 225 Index shot up by 1.0 percent, while Hong Kong's Hang Seng Index jumped by 1.7 percent.

The major European markets also showed strong moves to the upside on the day. While the German DAX Index spiked by 2.6 percent, the French CAC 40 Index is surged by 2.3 percent and the U.K.'s FTSE 100 Index advanced by 1.2 percent.

In the bond market, treasuries extended yesterday's slump in reaction to the upbeat jobs data. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, jumped 9.1 basis points to 4.322 percent.

Looking Ahead

The Federal Reserve's latest interest rate decision is likely to be in focus next week along with reports on service sector activity and the U.S. trade deficit as well as any developments on the trade front.

Trading may also be impacted by reaction to the latest earnings news, with a slew of well-known companies due to report their quarterly results.