Oct 3, 2014 1:16 PM
Dow jumps 200 pts on job gains; Gold, bonds fall
The Associated Press
NEW YORK (AP) A surge in hiring by U.S. employers drove the Dow Jones industrial average up 200 points in early afternoon trading Friday. The better-than-expected job gains added to evidence of a two-speed global economy as the U.S. strengthens while many other countries stumble. That pushed the value of the dollar as measured against other major currencies to the highest level in four years. U.S. bonds and gold fell as investors anticipated higher interest rates.
KEEPING SCORE: The Dow rose 204 points, or 1.2 percent, to 17,005 as of 1:09 p.m. Eastern time. The index is on track for its third 200-point move in a little over a week as markets turn more volatile.
The Standard & Poor's 500 index climbed 23 points, or 1.1 percent, to 1,969. The Nasdaq composite rose 53 points, or 1.2 percent, to 4,483. Even with the gains, all three indexes are still on track for a second week of losses.
PAYROLLS IN FOCUS: U.S. employers added 248,000 jobs in September, beating market expectations of a 215,000 increase. The hiring helped drive down the unemployment rate to 5.9 percent, the lowest since July 2008, from 6.1 percent in August.
The Labor Department also revised up its previously released hiring estimates for July and August. The Fed is closely watching the jobs data as it assesses when to start raising interest rates.
The good U.S. news contrasts with troubling signs in Europe. On Thursday, the European Central Bank disappointed investors by not announcing details of more stimulus measures as the 18-country eurozone once again teeters on recession. Stocks rose there on Friday, but major European indexes are still down sharply for the week.
DOLLAR SPIKES: The U.S. Dollar Index, which measures the dollar against six other major currencies, surged 1.1 percent to its highest level in more than four years. The euro fell 1.3 percent to $1.2510 while the dollar gained 1.2 percent to 109.81 yen.
ANALYST'S TAKE: "The solid payroll report is great for economic growth and stock prices," said Anastasia Amoroso, Global Market Strategist at J.P. Morgan Funds. "The U.S. really stands out" from the rest of the world.
DRUG HIGHS: Shares of Mylan jumped 8 percent after the generic drugmaker raised its outlook for the third quarter and year. The stock rose $3.77 to $50.27. Salix Pharmaceuticals rose nearly 1.6 percent on news it is scrapping its merger with the subsidiary of an Italian drugmaker after the U.S. created new limits on the tax benefits of incorporating overseas. The stock rose $2.37 to $153.46.
HONG KONG: Hong Kong's Hang Seng index erased an early loss and closed up 0.6 percent despite continuing pro-democracy protests. Stocks rallied after Chief Executive Leung Chun-ying offered talks with protesters, who oppose plans to require candidates for the 2017 election for his successor to be approved by a panel dominated by pro-Beijing business leaders. Protesters say the communist mainland government is reneging on a promise of "universal suffrage" for the territory. Stocks in retailing and tourism have plunged but analysts say the economic impact of the protests is limited.
ENERGY: Benchmark U.S. crude oil fell $1.06 to $89.96 a barrel in New York despite concern that supplies exceed global demand.
GOLD AND BONDS: Gold and Treasurys fell as traders moved money out of safe-haven assets. Gold fell 1.9 percent to $1,191.90 an ounce. The yield on the 10-year Treasury note rose to 2.45 percent.