Dow soars over 500 points as Wall Street shrugs off dismal jobs report

The Dow jumped more than 500 points on Friday, recovering some losses from the previous session, as Amazon’s strong earnings countered Apple’s weaker China sales and investors assessed a significant drop in US jobs growth in October.

In recent trading, the Dow Jones Industrial Average was up 496 points, or 1.2%, to 42,259.

The S&P 500 added 0.9%, and the Nasdaq gained 1.3%.

All three major indexes remained on track for weekly declines, with the S&P 500 and the Nasdaq set for their worst week in eight.

Amazon soared 6.5%, on track for its best day since February, as strong retail sales lifted its profit above Wall Street estimates.

Meanwhile, dropped 0.5% despite beating quarterly sales forecasts, as investors worried about a decline in China sales.

Equity markets broadly overlooked weak October nonfarm payrolls data, given disruptions from hurricanes and strikes.

The data showed an increase of 12,000 jobs, much smaller than economists’ estimate of a 113,000 rise.

However, the unemployment rate held steady at 4.1%, reassuring investors the labor market remained on a solid footing ahead of the presidential election.

“This doesn’t really change much in terms of what’s expected from a Fed standpoint, or thoughts around the slowing economy,” said Charlie Ripley, senior investment strategist for Allianz Investment Management.

After the data’s release, investors largely stuck to bets that the central bank would cut rates by 25 basis points in November as well as December.

Treasury yields eased following the labor report.

They had risen to nearly four-month highs in recent weeks, pressuring equities. 

US October ISM manufacturing PMI was at 46.5, slightly below the 47.6 forecast.

The Nov. 5 election is on investors’ minds, with many analysts predicting a close race and some uncertainty over the final outcome.

The Fed’s November meeting kicks off the following day.

Unsurprisingly, equity volatility has risen in recent days, with the CBOE Volatility Index trading around its highest in three weeks, though it eased slightly from Thursday’s nearly two-month high.

“We’ll have to continue to watch to see if there’s a broader trend of slowdown for tech spending and the productivity that comes out of the sector,” Ripley said.

Intel jumped 5.4% after a better-than-expected revenue forecast and lifted other chip stocks, with Nvidia rising 2.3%.

Oil majors also rose, with Chevron adding 4% after beating third-quarter profit estimates on higher oil output.

Shares of Boeing gained 2.4% after a union of striking workers endorsed an improved contract offer, with members expected to vote on Monday.