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Summary List Placement- US stocks erased some losses as traders digested the strong jobs report and rising yields.
- The US added 379,000 jobs in February, beating the consensus estimate of 200,000 additions.
- The 10-year treasury yield extended its surge to top 1.61%, the highest point in a year.
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US stocks rebounded after a sharp sell-off Thursday with the Dow gaining over 300 points following a blowout jobs report while yields rose.
Businesses added 379,000 payrolls in February, the Bureau of Labor Statistics announced Friday. Economists surveyed by Bloomberg expected a gain of 200,000 payrolls. The US unemployment rate fell to 6.2% from 6.3%, according to the government report. Economists expected the rate to drop to stay steady at 6.3%.
The 10-year Treasury yield extended its surge to top 1.61%.
"The better-than-expected jobs report suggests a healthy economic rebound in progress and will likely add upward pressure on bond yields, as the bond market prices in a stronger economy, which may result in more consumer spending and eventually more inflation," said James McDonald, Hercules Investments CEO and CIO.
"The biggest risk to the stock market is if the Federal Reserve loses control of bond yields, which have experienced a meteoric rise over the past month. Inflation will continue to exert upward pressure on yields going forward and into the summer months," McDonald added.
On Thursday, Federal Reserve Chairman Jerome Powell gave little indication that the world's most powerful central bank was willing to intervene in the recent government bond sell-off.
"I'd be concerned by disorderly conditions in markets, or by a persistent tightening in financial conditions," he told the Wall Street Journal jobs summit. He said the Fed was keeping an eye on "a broad range of financial conditions," not just one indicator. Investors took Powell's words to mean that the Fed was fine with yields rising further.
Here's where US indexes stood after the 9:30 a.m. ET open on Friday:
- S&P 500: 3,804.66, up 0.96%
- Dow Jones industrial average: 31,232.15 up 1% (308.01 points)
- Nasdaq composite: 12,840.92, up 0.82%
Chamath Palihapitiya cashed out his entire stake in Virgin Galactic for $211 million. The billionaire still indirectly owns 15.8 million shares in Richard Branson's startup.
Bitcoin is struggling to break past the $50,000 level and hovered below $48,000 Friday morning.
Oil prices rose sharply overnight after the OPEC group of oil producers and its allies unexpectedly agreed to continue limiting supply. West Texas Intermediate crude jumped as much as 2.9%, to $65.66 per barrel. Brent crude, oil's international benchmark, rose by 3.04%, to $68.78 per barrel.
Gold jumped 0.16%, to $1,703.50 per ounce.
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See Also:
- An investment strategist shares the stock sector and 4 specific picks that offer the best chance to beat the market following the Treasury yield-driven sell-off in tech
- A CIO who earned up to 90% per trade during last year's crash is now warning of a potential 20% crash in the S&P 500 by the end of March as 10-year Treasury yields continue to rise
- RBC's US equities chief shares 3 sector recommendations to profit from higher yields — with 3 reasons why stocks are still primed for gains despite the scare from the bond market