Inventories record huge gains after job creation and trade negotiations

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NEW YORK (AP) – Global stocks skyrocketed on Friday and canceled the heavy losses suffered a day earlier. The Dow Jones Industrial Average recorded a gain of 746 points in three months for the market.

Hopes of progress in the US-China trade dispute, a strong US labor market report, and encouraging comments from the US central bank's interest rate policy leader have all come to the fore. combined to encourage investors.

The Chinese Ministry of Commerce announced that the trade talks will be held Monday and Tuesday in Beijing, and that investors would again look for signs that the world's largest economic powers are resolving their dispute. Tensions have lasted for nearly a year, slowing business and leading to a decline in stock market indexes worldwide.

At the same time, the Department of Labor said that US employers had created 312,000 jobs last month, a result well above that anticipated by experts. US stocks have plummeted since October as investors fear the economy will slow down considerably due to difficulties such as the trade dispute and rising interest rates.

The fall of the stock market also threatened to upset the confidence and the plans of expenditure of companies and consumers. Some analysts have said investors are acting as if a recession is on the horizon, despite the lack of data indicating that the US economy is struggling.

"It's hard to reconcile the recession's worry with the strongest job growth seen in years," said Alec Young, managing director of global market research at FTSE Russell.

Shares rose further after Federal Reserve Chairman Jerome Powell said the central bank would be flexible in deciding whether and when it would raise interest rates. He added that the Fed was willing to change its way of reducing its huge portfolio of bonds, which affects the rates of long-term loans such as mortgages.

Until recently, the Fed had suggested raising short-term interest rates three times this year and next year, and Powell said the Fed's balance sheet was shrinking "over the Automatic pilot". Wall Street feared the Fed would increase loan costs too quickly, said Phil Orlando, chief stock strategist at Federated Investors.

Fed policies on interest rates and bond portfolios "top the list of concerns we are concerned with, so today's statement by Powell supports the market." said Orlando. "The Fed understands that what they tried to communicate last month was nonsense, that they did not get the message across and Powell tried to reset."

The S & P 500 index climbed 84.05 points, or 3.4%, to 2,531.94, more than Thursday's loss. The Dow rose 3.3% to 23,433.16 after gaining 832 points in the afternoon. The Nasdaq composite jumped 275.35 points, or 4.3%, to 6,738.86.

About 90% of the shares of the New York Stock Exchange traded higher.

Shares fell on Thursday after Apple said iPhone sales in China were down, partly because of the commercial fight, and a poll suggested that US factories were growing at a more moderate pace . Technology companies suffered their biggest losses in seven years.

The United States and China have increased tariffs on billions of dollars of reciprocal goods as part of a struggle for issues such as Beijing's technology policy. Last month, President Donald Trump and Chinese leader Xi Jinping agreed on a 90-day ceasefire as a means of defusing tension, but that did not calm the stock market. .

Technology companies, banks, health care companies and industrial companies all made strong progress. Most businesses in these industries should do better in times of faster economic growth.

Smaller, more US-based firms outperformed large multinationals. The Russell 2000 index jumped 49.92 points, or 3.8%, to 1,380.75. Small businesses have fallen even more than the larger ones in recent months as investors are worried about the US economy's evolution in 2019 and 2020.

Stocks have hovered between huge gains and losses in the last few weeks following their sharp fall in December. Katie Nixon, chief investment officer for Northern Trust Wealth Management, said investors would continue to react to the health of the economy and worries about the high level of corporate debt as interest rates rise .

"We do not expect this to end volatility," she said. "There is more and more evidence that we will see a slowdown," even if it does not matter.

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Bond prices also changed course and fell sharply. The yield on the 10-year Treasury note reached 2.66% after plunging Thursday to 2.55%, its lowest level in almost a year. This helps banks, as higher interest rates allow them to make greater profits on mortgages and other loans.

European equities also surpassed yesterday's losses, with the German DAX gaining 3.4% and the French CAC 40 2.7%. The British FTSE 100 gained 2.2%.

In Asia, Hong Kong's Hang Seng jumped 2.2%. Kospi from South Korea added 0.8%. The Japanese Nikkei 225 index fell 2.3% on the first day of trading in 2019, while technology and electronics manufacturers were weakened by the Apple report that the iPhone sales in China were declining.

US crude oil rose 1.8% to $ 47.96 a barrel in New York. Brent, used for the price of international oil, rose 2% to 57.06 dollars a barrel in London.

The dollar is strengthened. It went from 107.77 yen to 108.51 yen. The euro rose from 1.1391 dollar to 1.14 dollar. The pound fell from 1.2630 USD to 1.2740 USD.

Wholesale gasoline dipped 0.1% to $ 1.35 a gallon and heating oil added 1.6% to $ 1.77 a gallon. Natural gas increased 3.4% to $ 3.04 per 1,000 cubic feet.

In other transactions, gold fell 0.7% to $ 1,285.80 an ounce and silver fell 0.1% to $ 15.79. ounce. Copper rose 3.1% to $ 2.65 a pound.

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Stan Choe has contributed to this story since New York. Annabelle Liang contributed from Singapore.

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Marley Jay, Stock Market Writer, is available at http://twitter.com/MarleyJayAP