Tech leads market rebound; hiring surges
A powerful rally to end the week on Wall Street after a big three-day slump unraveled investor confidence.
By the time the closing bell rang on Friday, the Dow surged 572 points. The S&P 500 jumped 73. The Nasdaq rallied 196 points.
It's been a tough time for tech stock - the Nasdaq was down for the third straight week.
A hefty rebound in employment fueled hopes of better economic days ahead. Employers added a much better-than-expected 379,000 new jobs in February.
The lion's share of the hiring came from restaurants and bars, which accounted for 75 percent of all the job gains in February. Hiring was up across the board for entertainment, leisure and recreation industries. The key unemployment rate dropped to 6.2 percent. But even with February's hiring surge the economy still has to recover 10-1/2 million jobs lost since the health crisis hit last year.
Nevertheless, investors should feel good about the economic outlook and the stock market, says Jerry Braakman, chief investment officer, First American Trust.
"I think when you look two to three quarters ahead, at the rate where we're vaccinating folks by a million to 1.5 million a day, we have some 300 million folks in the U.S., in 200-300 days we will be able to vaccinate all the people in the US and that is a game changer. So when you look back between that and another $1.9 trillion or somewhere around there of additional stimulus that hits people's checking accounts, I think that creates a great setup."
Economic hopes also pushed interest rates higher. Yields on the U.S. government's benchmark 10-year note jumped to its highest in over a year.
Higher interest rates are likely to make it more costly for high-growth companies like Tesla to do business. The electric car maker was left out of Friday's rally, capping what was a terrible week in which the stock dropped 11 percent.
