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Financial Markets 11/01 15:29
NEW YORK (AP) -- Amazon led U.S. stock indexes higher on Friday, while a
surprisingly weak jobs report marred by some unusual occurrences cemented bets
on Wall Street for another cut to interest rates next week.
The S&P 500 rose 0.4% to recover some of its loss from the day before, which
was its worst in eight weeks. The Dow Jones Industrial Average added 288
points, or 0.7%, while the Nasdaq composite gained 0.8%.
Amazon climbed 6.2% after delivering a bigger profit for the latest quarter
than analysts expected and was the strongest force pushing the S&P 500 higher.
Intel, meanwhile, rallied 7.8% despite reporting a worse loss than expected.
Its revenue topped analysts' estimates, and it gave a forecast for results in
the current quarter that likewise topped expectations. Cardinal Health was
another one of the market's bigger gainers and jumped 7% after topping
analysts' forecasts for profit and revenue in the latest quarter. It also
raised its profit forecast for its fiscal year, which is only in its second
quarter.
They helped offset a 1.2% slide for Apple, which said it expects revenue
growth in the important holiday quarter to be in the low to mid-single digit
percentages. That was below several analysts' forecasts.
All told, the S&P 500 rose 23.35 points to 5,728.80. The Dow gained 288.73
to 42,052.19, and the Nasdaq composite added 144.77 to 18,239.92.
In the bond market, Treasury yields pushed higher following some swings
after a highly anticipated report said U.S. employers added only a net 12,000
workers to their payrolls last month. That was far short of the 115,000 in
hiring that economists were expecting or the 223,00 jobs that employers created
in September.
The nearly unanimous expectation on Wall Street remains for the Federal
Reserve to cut its main interest rate by a quarter of a percentage point next
week. But the weaker-than-expected jobs report wiped out the slim chance
traders had been seeing of the Fed holding rates steady, according to data from
CME Group.
The Fed kicked off its rate-cutting campaign in September with a
larger-than-usual cut of half a percentage point, as it turns more attention to
keeping the job market solid instead of focusing on just driving inflation
lower.
The two-year Treasury yield, which closely tracks expectations for the Fed's
actions, initially fell following the jobs report but then climbed to 4.20%
from 4.18% late Thursday.
The yield on the 10-year Treasury, which also takes future economic growth
and other factors into account, likewise rose after a knee-jerk drop. It
climbed to 4.37%, up from 4.29% late Thursday.
Economists said Friday's jobs report contained a lot of noise and perhaps
not much signal. Besides two hurricanes that left destructive paths across the
United States during the month, a strike by workers at Boeing also helped
depress the numbers.
All those distortions make the numbers difficult to parse, "but it doesn't
change our view that the labor market should further decelerate in coming
months," said Scott Wren, senior global market strategist at Wells Fargo
Investment Institute.
The hope on Wall Street is that the economy will still avoid a recession,
even with that expected slowdown in the job market, thanks in part to coming
cuts to interest rates by the Fed. The overall economy has so far remained more
resilient than feared.
A separate report on Friday said U.S. manufacturing contracted by more last
month than economists expected. It's been one of the areas of the economy hurt
most by the Fed's keeping interest rates at a two-decade high until September.
In stock markets abroad, indexes rose across much of Europe after finishing
lower across much of Asia outside of Hong Kong.
The price of oil, meanwhile, rose again to further trim its loss for the
week. A barrel of benchmark U.S. crude rose 0.4%. Brent crude, the
international standard, also climbed 0.4%.
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AP Writers Matt Ott and Zimo Zhong contributed.
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