US stocks rally after downbeat jobs report

U.S. stocks traded lower in the morning session Friday, as investors believed that the possibility of a September rate hike became lower following the release of a disappointing nonfarm jobs report.

Around midday, the Dow Jones Industrial Average rose 89.10 points, or 0.48 percent, to 18,508.40. The S&P 500 added 8.34 points, or 0.38 percent, to 2,179.20. The Nasdaq Composite Index gained 21.58 points, or 0.41 percent, to 5,248.78. U.S. total nonfarm payroll employment increased by 151,000 in August, well below market consensus of 175,000, and the unemployment rate remained at 4.9 percent, the Labor Department reported Friday.

In August, average hourly earnings for all employees on private nonfarm payrolls rose by 3 cents to 25.73 U.S. dollars. Over the year, average hourly earnings have risen by 2.4 percent.

Investors were closely watching the jobs report as they looked for more clues about when the Federal Reserve may raise rates.

In the past weeks, Fed Chairwoman Janet Yellen and Vice Chairman Stanley Fischer have both indicated that a rate increase could occur within the next three months in an effort to resume normalization of monetary policy.

However, a weaker-than-expected August jobs report eased fears that the Fed would begin its next rate hike as soon as September, since the Federal Open Market Committee (FOMC) is set to meet on Sept. 20-21.

"Bloomberg News' headline: 'August Payrolls Not Enough for September Hike' sums up the gut reaction to the August jobs report. But be careful. The economy added 697k jobs in the past three months, an average monthly gain of 232k. Fed officials are not likely to be nearly as dismissive as Bloomberg' s headline writers. Watch for FOMC participants to talk expectations back up next week," said Chris Low, Chief economist at FTN Financial.

On Thursday, U.S. stocks closed mixed after wavering between small gains and losses, as Wall Street digested an array of economic data.

Source : XINHUA