Dow surges 747 points, pushed higher by Fed chairman's comments and strong jobs report

Stocks roared back Friday after investors received three belated New Year's presents.The job market i...

Posted: Jan 5, 2019 1:46 PM
Updated: Jan 5, 2019 1:46 PM

Stocks roared back Friday after investors received three belated New Year's presents.

The job market is still robust. China took action to stimulate its slowing economy. And Federal Reserve Chairman Jerome Powell said the Fed will be flexible in its plan to hike interest rates. All three of those events addressed issues that investors have been particularly concerned about over the past several months.

Banking, finance and investments

Business, economy and trade

Economic indicators

Economy and economic indicators

Financial markets and investing

Labor and employment

Labor sector performance

Securities trading

Stock indexes

Stock markets

Employment trends

Unemployment rates

Asia

China

Continents and regions

East Asia

Government organizations - US

Interest rates

The Fed

US federal departments and agencies

US government independent agencies

North America

The Americas

United States

Economic conditions

Economic decline

Economic policy

Jerome Powell

Monetary policy

Political Figures - US

The Dow soared 747 points, or 3.3% — its fourth-biggest point increase of all time. The Dow has now surged 1,641 points, or 8%, since Christmas Eve.

The S&P 500 rose 3.4% and Nasdaq was up 4.3%.

Every sector of the market was up Friday. Only 16 of the stocks in the S&P 500 index were negative. AMD (AMD), which led all S&P 500 stocks in 2018, was up another 11%.

Riskier stocks led the rally, including tech companies that have gotten killed lately: Facebook (FB) rose 5%, Apple (AAPL) was up 4% after its worst day in six years. Amazon (AMZN) rose 5%, Netflix (NFLX) rose 10% and Alphabet (GOOGL) was 4.3% higher.

"I thought stock market concerns about growth were overblown," said Gus Faucher, chief economist at PNC. "This proves I was correct."

A sigh of relief

At the American Economic Association conference in Atlanta Friday morning, Federal Reserve Chairman Jerome Powell reiterated the strengths of the economy but also signaled the Fed would remain flexible in its management of interest rates. The Fed has worked to gradually increase interest rates over the past couple years, unnerving investors who worried the Fed could bring about a recession by hiking rates too quickly.

"Investors are breathing a sigh of relief right now," Sam Stovall, chief investment strategist at CFRA Research, told CNN.

The central bank indicated at last month's meeting that the economy likely warranted two rate increases in 2019.

But Powell struck a more cautious stance on Friday about future moves. Although Powell called the December jobs report "very strong," he stressed that the Fed is "always prepared" to shift the stance of policy if needed.

"We will be patient as we watch to see how the economy evolves," Powell said.

Strong jobs market

Friday's jobs report signaled the US economy still has some strength left in it.

Employers added 312,000 jobs in December, well more than economists had forecast. Friday's jobs report was the biggest surprise of the economic cycle, according to Goldman Sachs

The unemployment rate rose to 3.9% because many people reentered the workforce. And paychecks grew a better-than-expected 3.2% from a year ago as employers raised wages to attract new workers. Average hourly pay was up 3.2% compared to a year earlier. The average number of hours people worked also edged up.

"It seems to be a pretty good indication that the economy isn't anywhere close to recession, at least for now," said Brian Rose, chief Americas economist at UBS Asset Management.

China stimulus

Stocks also got a boost after China took steps to encourage bank lending and stimulate the country's flagging economy. The People's Bank of China announced it would slash the amount of money that banks are required to hold in reserve, the latest in a series of policy changes the government has taken to support growth.

China's slowing economy has been a prime factor in the extreme market volatility of the past several months.

Analysts at Macquarie Capital said that the rate cut shows government efforts to support the economy have now moved to the "second level" and should signal to investors that more stimulus is in the pipeline.

Roller coaster ride

The up and down market continues.

Stocks tumbled Thursday. The Dow plunged 660 points, following Apple's (AAPL) warning that its sales would fall well short of guidance, largely because of China's economic slowdown. They fell even further after a weak manufacturing report suggested the trade war was harming both China and the United States' economy.

Stocks have been unusually volatile in recent weeks. The S&P 500 was up or down more than 1% nine times in December, compared to only eight times in all of 2017.

Japan's Nikkei index dropped 2.3% Friday, that market's first day of trading following the New Year break.

West Lafayette
Clear
59° wxIcon
Hi: 63° Lo: 56°
Feels Like: 59°
Kokomo
Clear
59° wxIcon
Hi: 61° Lo: 55°
Feels Like: 59°
Rensselaer
Scattered Clouds
54° wxIcon
Hi: 60° Lo: 50°
Feels Like: 54°
Fowler
Scattered Clouds
54° wxIcon
Hi: 61° Lo: 52°
Feels Like: 54°
Williamsport
Broken Clouds
56° wxIcon
Hi: 63° Lo: 55°
Feels Like: 56°
Crawfordsville
Overcast
53° wxIcon
Hi: 65° Lo: 58°
Feels Like: 53°
Frankfort
Clear
58° wxIcon
Hi: 64° Lo: 56°
Feels Like: 58°
Delphi
Broken Clouds
54° wxIcon
Hi: 61° Lo: 54°
Feels Like: 54°
Monticello
Broken Clouds
54° wxIcon
Hi: 59° Lo: 52°
Feels Like: 54°
Logansport
Scattered Clouds
55° wxIcon
Hi: 60° Lo: 51°
Feels Like: 55°
Near Record Heat On The Way
WLFI Radar
WLFI Temps
WLFI Planner

Indiana Coronavirus Cases

Data is updated nightly.

Confirmed Cases: 150664

Reported Deaths: 4008
CountyConfirmedDeaths
Marion24697784
Lake13220352
St. Joseph8877159
Elkhart8469132
Allen7880222
Hamilton5962113
Vanderburgh559360
Tippecanoe354714
Monroe320738
Hendricks3183130
Johnson2995128
Porter297848
Clark285461
Delaware282074
Vigo252637
Madison229593
Cass222021
LaPorte215557
Warrick188464
Kosciusko176823
Floyd174867
Howard158866
Bartholomew139758
Dubois135125
Marshall132526
Henry122628
Grant120939
Wayne119327
Boone118848
Hancock114145
Noble113533
Jackson108713
Morgan92240
Dearborn91628
Daviess84033
Gibson83411
Clinton81616
Shelby79429
Lawrence78534
LaGrange76715
Harrison74024
Putnam71016
Knox70310
DeKalb69411
Posey6796
Steuben6008
Fayette58517
Miami5845
Montgomery57222
White56815
Jasper5624
Greene51837
Scott50813
Decatur49839
Adams4725
Clay4346
Whitley4316
Sullivan42812
Ripley4228
Wells4155
Starke3937
Wabash3919
Orange38725
Huntington3785
Spencer3706
Franklin36525
Jennings36013
Washington3592
Randolph3398
Fulton3362
Jefferson3305
Pike31913
Carroll31413
Perry29514
Jay2876
Fountain2863
Tipton26823
Parke2203
Newton21811
Vermillion2181
Rush2044
Owen2021
Martin1950
Blackford1923
Crawford1491
Pulaski1471
Brown1303
Ohio1227
Benton1070
Union1040
Switzerland890
Warren751
Unassigned0233

COVID-19 Important links and resources

As the spread of COVID-19, or as it's more commonly known as the coronavirus continues, this page will serve as your one-stop for the resources you need to stay informed and to keep you and your family safe. CLICK HERE

Closings related to the prevention of the COVID-19 can be found on our Closings page.

Community Events