The stock market achieves its highest gains in three months following a report from the U.S government of a strong job growth last month.
The encouraging news of the economy recovery resulted to the Federal Reserve deciding on bringing the interest rates back to normal levels. U.S. oil prices and energy stocks, however, did not enjoy the same development since OPEC continued to roll over its decision to continue crude oil production.
The Dow Jones Industrial gained 369.96 points, equivalent to 2.1 percent, from 17477.67 to 17,847.63. The Standard & Poor 500 index, on the other hand, showed 2.1 percent increase or 42.07, at 2,091.69 from its closing the previous day.
Other companies also demonstrated positive figures with Apple increasing 3.3 percent, a rise of $3.83 and resulting to $119.03. Homebuilder D.R. Horton, Mattel and discount retailer Dollar Tree are also showing increased indexes.
Nasdaq composite enjoyed 2.1 percent increase which is equivalent to 104.74 points and yielded 5,142.27 points when the stock market opened.
Gold increased at $22.90 as well as silver and copper with 45 cents and 1.8 cents, respectively. Avon stocks also rose after reports from the media surfaced that it is looking into putting its North American business in the market, with Cerberus Capital Management as its buyer.
The stocks rose sharply just a day after Labor Department came with a report that 211,000 jobs were offered by U.S. employers in November. This was seen as a good indication that Americans still have spending power despite the slump of energy and manufacturing companies.
Energy stocks fell behind and are not expected to gain momentum due to the warm weather in the U.S. Consumers are not looking into increasing their demands for heating fuels and this is preventing oil and gas companies from overturning their low sales.
Helmerich & Payne plummeted to 2.23 or 4 percent. Conversely, Murphy Oil suffered a 3.2 percent decrease while Cedapeake Energy fell 32 cents, which is equivalent to 6.6 percent.
Meanwhile, Chief Investment Officer of Wells Fargo Private Bank, Erick Davidson commented that the data shared by the Labor Department brought back the confidence of investors as the economy gains footing. The clarification statement from the European Central Bank also had a positive impact.
It will be recalled that stocks and bonds suffered a slump on Thursday when ECB was unable to execute what it stated before, its use of new stimulus measures to nudge the stock market. ECB President Mario Draghi raised investors’ hopes, however, when he clarified the issue.
Draghi announced that ECB is looking to broaden these measures if the situation calls for it. Davidson said that this statement as well as the job data and the plans of the Federal Reserve were enough for investors to hear.
During the Great Recession, the Federal Reserve cut down its short-term interest rate to almost zilch and continued the trend in the last nine years. It was deliberately done to bring the employers to hire and the people to apply for loans.
Meanwhile, the dollar rose against the euro and yen as bond prices made recovery.