Reversal of misfortunes
Job news, trade talks send stocks soaring
Global stocks soared Friday and reversed the big losses they suffered just a day earlier. The Dow Jones Industrial Average rallied 746 points in the latest twist in a wild three months for markets.
Hopes for progress in the U.S.-China trade dispute, a strong report on the U.S. jobs market and encouraging comments from the head of the U.S. central bank about its interest rate policy all combined to cheer investors.
China’s Commerce Ministry said trade talks will be Monday and Tuesday in Beijing, and investors will again look for signs the world’s largest economic powers are resolving their dispute. The tensions have dragged on for nearly a year, slowing business and dragging down stock indexes worldwide.
Meanwhile the Labor Department said U.S. employers added 312,000 jobs last month, a far stronger result than experts had anticipated. U.S. stocks have tumbled since October as investors worried that the economy might slow down dramatically because of challenges including the trade dispute and rising interest rates.
The stock market’s plunge also threatened to shake up the confidence and the spending plans of businesses and consumers. Some analysts said investors were acting as if a recession was on the horizon, despite a lack of evidence that the U.S. economy is struggling.
“It’s hard to square recession worries with the strongest job growth we’ve seen in years,” said Alec Young, managing director of global markets research for FTSE Russell.
Stocks rose even further after Federal Reserve Chairman Jerome Powell said the central bank will be flexible in deciding if and when it raises interest rates. He added that the Fed is open to making changes in the way it shrinks its giant portfolio of bonds, which affects rates on long-term loans such as
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