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Dow jumps more than 700 points, propelled by Powell’s comments and a blowout jobs report

Powell added the central bank would not “hesitate” to change its balance-sheet reduction plan if it was causing problems. Fears that the Fed may be making a policy error by tightening too fast have contributed to the recent skittishness in financial markets, according to several market experts.

“I think he did what the market hoped he would do,” said Tom Essaye, founder of The Sevens Report. “What he did with these comments is he acknowledged that they need to be more flexible.”

“This is worth a bounce, but at the same time, the major issues facing the market are not resolved. We have a potential earnings problem in this market; we have a potential economic growth problem in this market,” Essaye added. “Today’s rally is more a result of the overextended downside from yesterday.”

Boeing led the Dow higher after the jobs reported lessened fears that the economy was slowing down. Shares of the plane maker surged 5.2 percent.

“We created jobs across the board; I don’t think most of it was seasonal,” said JJ Kinahan, chief market strategist at TD Ameritrade. “But the most interesting thing on this report was the amount of people who left their jobs voluntarily. I think that’s a really good consumer-confidence measure.”

“As much as we all got nervous about Apple yesterday … this puts a counter to that,” he added.

Gains in tech-related names also boosted the broader market. Netflix and Intel rose 9.7 percent and 6.1 percent, respectively. Netflix rose after Goldman Sachs added the streaming service to its conviction buy list. Analyst Heath Terry called Netflix “one of the best risk/reward propositions in the Internet sector.” Dow-member Intel rose after Bank of America Merrill Lynch upgraded it to buy from neutral.

The gains in Netflix and Intel also lifted other tech-related stocks. Facebook, Amazon, Apple and Google-parent Alphabet all rose more than 4 percent. The Technology Select Sector SPDR fund, which tracks the S&P 500 tech sector, gained 4.4 percent.

Tech’s move higher took place after the sector fell 5.07 percent on Thursday, its worst daily performance since Aug. 18, 2011, when it fell 5.35 percent. The sharp move lower was triggered by a dire quarterly warning from Apple, which propelled the tech giant’s stock to its worst day in six years and dampened market sentiment across the world. Apple slashed its fiscal first-quarter revenue guidance earlier this week, citing an unexpected slowdown in China.

The announcement comes as China and the U.S. try to strike a deal on trade. China’s commerce ministry said the U.S. and Chinese would hold vice-ministerial level negotiations over trade in Beijing on Jan. 7-8.

—CNBC’s
Silvia Amaro
contributed to this report.

Source: CNBC

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