Stocks moved sharply higher over the course of the trading day on Friday, extending the recovery rally seen during trading Thursday’s session. The major averages more than offset the steep drop seen on Wednesday, with the Dow and the S&P 500 reaching new record closing highs.

The major averages pulled back off their best levels going into the close but remained in positive territory. The Nasdaq surged 267.31 points or 1.7 percent to 15,628.95, the S&P 500 jumped 52.42 points or 1.1 percent to 4,958.61 and the S&P 500 climbed 134.58 points or 0.4 percent to 38,654.42.

For the week, the Nasdaq shot up by 1.1 percent, while the Dow and the S&P 500 both jumped by 1.4 percent.

The extended rally on Wall Street came amid a positive reaction to earnings news from Facebook parent Meta Platforms (NASDAQ:META) and online retail giant Amazon (NASDAQ:AMZN).

Shares of Meta are soared by 20.3 percent after the company reported better than expected fourth quarter results, announced its first-ever quarterly dividend and authorized a $50 billion share buyback.

Amazon also spiked by 7.9 percent after reporting fourth quarter results that exceeded analyst estimates on both the top and bottom lines.

Traders were also reacting to a closely watched report from the Labor Department showing much stronger than expected job growth in the month of January.

The Labor Department said non-farm payroll employment spiked by 353,000 jobs in January compared to economist estimates for an increase of about 180,000 jobs.

The report also showed significantly stronger than previously reported job growth in December, with employment surging by 333,000 jobs during the month compared to the jump of 216,000 jobs that had been reported.

The Labor Department also said the unemployment rate in January came in unchanged from the previous month at 3.7 percent. Economists had expected the unemployment rate to inch up to 3.8 percent.

While the data further reduces the chances of an interest cut in March, Larry Tentarelli, Chief Technical Strategist, Blue Chip Daily Trend Report, said he views a strong jobs market as a “net positive for both the economy and the stock market.”

Sector News

Retail stocks saw substantial strength on the day, with the strong jobs data generating optimism about the outlook for consumer spending.

Reflecting the strength in the retail sector, the Dow Jones U.S. Retail Index surged by 3.1 percent to its best closing level in two years.

Considerable strength was also visible among brokerage stocks, as reflected by the 1.9 percent gain posted by the NYSE Arca Broker/Dealer Index.

Software, semiconductor and airline stocks have also showed strong moves to the upside over the course of the session.

On the other hand, gold stocks pulled back sharply after rallying on Thursday, resulting in a 3.4 percent nosedive by the NYSE Arca Gold Bugs Index.

The sell-off by gold stocks came amid a notable decrease by the price of the precious metal, with gold for April delivery slumping $17.40 to $2,053.70 an ounce.

Oil service stocks also came under pressure amid a steep drop by the price of crude oil, moving significantly lower along with interest rate-sensitive commercial real estate, utilities and telecom stocks.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region turned in yet another mixed performance on Friday. Japan’s Nikkei 225 Index rose by 0.4 percent and South Korea’s Kospi spiked by 2.9 percent, while China’s Shanghai Composite Index tumbled by 1.5 percent.

The major European markets also finished the day mixed. While the U.K.’s FTSE 100 Index edged down by 0.1 percent, the French CAC 40 Index inched up by 0.1 percent and the German DAX Index climbed by 0.4 percent.

In the bond market, treasuries have pulled back sharply after moving notably higher over the past several sessions. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is up by 18.4 basis points at 4.047 percent.

Looking Ahead

Following a week full of key economic events, the U.S. economic calendar for next week is relatively quiet. Traders are still likely to keep an eye on reports on weekly jobless claims, service sector activity and the U.S. trade deficit.

Earnings news may remain in the spotlight, however, with Caterpillar (NYSE:CAT), McDonald’s (NYSE:MCD), Amgen (NASDAQ:AMGN), Ford (NYSE:F), Disney (NYSE:DIS) and PepsiCo (NASDAQ:PEP) among the companies due to report their quarterly results next week.

Source: RTT News