U.S stock indexes blasted higher Friday, stunning the bears and freeing the bulls from recent worries. A convergence of good news on payrolls, China's economy and dovish remarks from Federal Reserve chief Jerome Powell ignited the stock market.
XThe Nasdaq, small-cap Russell 2000 and big-cap S&P 500 soared 4.3%, 3.9% and 3.4%, respectively, in afternoon trade. The Dow Jones industrial average added 3.4%.
Volume was running slightly higher on the NYSE but lower on the Nasdaq compared with the previous session.
Bulls would like to see volume step up, which would make for a clearer sign of pronounced institutional participation.
In the blue-chip Dow Jones, all 30 components were up in afternoon action, with seven up 4% or more. Chipmaker Intel (INTC) leapt 5.5%; American Express (AXP), 5%; Caterpillar (CAT), 5%; Boeing (BA), 4.5%; Microsoft (MSFT), 4.5%; Visa (V), 4.3%; and Cisco Systems (CSCO), 4%.
In the S&P 500, Netflix (NFLX) gapped up almost 9% in heavy volume. The stock retook its 50-day moving average line. If Netflix can close above the 50-day, it will be the first time since mid-October.
Nonfarm payrolls skyrocketed to 312,000 jobs added in December, a number that no analyst expected. The most-bullish estimate was for 200,000 and the consensus view was 180,000. Unemployment rose from 3.7% to 3.9%, partly because of an increase in the participation rate. Manufacturing jobs rose 32,000 vs. estimates for 19,000.
Fed chair Powell did his part. In a speech in Atlanta, he said the Fed was ready "to adjust policy quickly and flexibly" if needed. The big leap in jobs, though, gave credibility to the Fed's rate policy.
In China, the Caixin service-sector purchasers index came in stronger than expected. Meanwhile, China's central bank slashed bank reserve requirements. Also, China said U.S.-China trade talks will take place Jan. 7-8 in Beijing.
Among IBD's 197 industry groups, only two fell. Gold miners slouched 1% and auto parts 0.3%. The day's biggest gainers included movies, metal ores and specialty steel stocks.
The size of the gains was impressive: 18 groups rose 5% or more; 36 added 4% to 5%; and 35 gained 3.5% to 4%.
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