Wall Street closes sharply higher, Nasdaq gains more than 4%
- Market sentiment improves on FOMC Chairman Powell's remarks.
- Pres. Trump says trade talks with China are going very well.
- Upbeat employment data provides an additional boost to stocks.
Reports of Chinese and U.S. officials meeting early next week to negotiate a trade deal and a higher-than-expected increase in the nonfarm payrolls in December allowed major equity indexes in the U.S. to open the day decisively higher. With FOMC Chairman Powell adapting a cautious tone regarding monetary policy tightening, Wall Street extended its rally and closed the day with impressive gains.
While speaking at a conference in Atlanta, Powell said that they would revisit the balance sheet program if the wind down were to cause problems in markets and added that they were always prepared to shift the policy stance. Commenting on today's market action, "When you get such a strong jobs report and a Fed chairman saying he's patient and flexible it sends a message to the markets that we're moving in the right direction," Robert Pavlik, chief investment strategist, senior portfolio manager at SlateStone Wealth LLC in New York, told Reuters.
All 11 major sectors of the S&P 500 closed the day in the positive territory with the risk-sensitive technology and communication services leading the rally with daily gains over 4%. Meanwhile, the trade-sensitive industrials and materials sectors added 3.9% and 3.85% after President Trump told reporters that trade talks with China were going very well.
The Dow Jones Industrial Average gained 746.94 points, or 3.29%, to 23,433.16, the S&P 500 added 84.05 points, or 3.43%, to 2,531.94 and the Nasdaq Composite rose 275.35 points, or 4.26%, to 6,738.86. For the week, these three indexes were up 1.61%, 1.86%, and 2.34%, respectively.