FILE - In this Sept. 13, 2019, file photo specialist Anthony Rinaldi, left, and trader Patrick Casey work on the floor of the New York Stock Exchange. The U.S. stock market opens at 9:30 a.m. EDT on Friday, Oct. 4. (AP Photo/Richard Drew, File)

Stocks climb as job report gives some solace after wild week

October 04, 2019 - 7:52 am

NEW YORK (AP) — Stocks climbed Friday after a report showed the U.S. jobs market is still growing enough for the unemployment rate to drop to a five-decade low, even though it's slowing.

The report gave some reassurance after a rough week dominated by surprisingly weak numbers on U.S. manufacturing and services activity, which raised recession worries and sent the S&P 500 to its first back-to-back loss of 1% this year. The index is still on track for its third straight week of losses.

Employers added 136,000 jobs last month, slightly less than the 145,000 that economists were expecting and below the 168,000 pace from August. Worker's wages were also weaker than expected, with zero growth from a month before. On the encouraging side, the government said hiring in prior months was stronger than earlier estimated, and the unemployment rate dropped to 3.5% from 3.7%.

"While the bears may take this as a further confirmation of a slower economy, it is actually a pretty strong read, especially when you factor in previous revisions" said Mike Loewengart, vice president of investment strategy at E-Trade Financial.

If the job market can remain strong, it would allow U.S. households to keep spending. And that spending strength has been the hero for the economy recently, propping it up when slowing growth abroad is threatening and President Donald Trump's trade war with China saps exports and manufacturing.

Stock markets around the world rose following the release of the report, and gold dipped as investors felt less need for safety.

KEEPING SCORE: The S&P 500 was up 0.4%, as of 10:45 a.m. Eastern time. The index, though, remains down 1.3% for the week.

The Dow Jones Industrial Average climbed 128 points, or 0.5%, to 26,329, and the Nasdaq composite gained 0.4%.

ECONOMIC CHECK: Anticipation built through the week for Friday's jobs report as a parade of weak data on the economy shook markets around the world. U.S. manufacturing activity contracted last month at its sharpest pace in a decade, and growth in the nation's services sector slowed.

Friday's mixed report shows a jobs market that is slowing but still growing, and economists said it may mean a rate cut at the Federal Reserve's meeting later this month is no longer a slam dunk. The Fed has already cut rates twice this year to shield the economy from the effects of slowing growth abroad and the U.S.-China trade war.

The year on the 10-year Treasury yield dipped to 1.51% from 1.53% late Thursday. The two-year yield, which moves more on expectations about Fed activity, rose to 1.39% from 1.37%.

SHINED UP: Apple helped drive the market higher after rising 1.7%. A Japanese newspaper, Nikkei, said that the company asked suppliers to boost production of its iPhone 11.

Moves in Apple's stock have an outsized effect on the S&P 500 because it's the second-largest constituent in the index by market size.

MARKETS ABROAD: European stock markets turned higher following the release of the U.S. jobs report, and the French CAC 40 gained 0.9%. The German DAX added 0.5%, and the FTSE 100 in London rose 1.1%.

In Asia, Tokyo's Nikkei 225 added 0.3%, while Hong Kong's Hang Seng tumbled 1.1% and Seoul's Kospi fell 0.6%.

COMMODITIES: Crude oil recovered some of its sharp losses from earlier in the week, which were spurred by worries about weakening demand and growing supplies.

Benchmark U.S. crude rose 51 cents, or 1%, to $52.96 per barrel. It started the week at $55.91. Brent crude, the international standard, gained 90 cents to $58.59 per barrel.

Gold gave back some of its big gains from earlier in the week and slipped $1.10 to $1,512.70 per ounce.

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AP Business Writers Joe McDonald and Matt Ott contributed to this report.