US: Stocks rally after mixed jobs report; Dow up 1.4%

[NEW YORK] Wall Street stocks jumped Friday after a mixed US jobs report mitigated fears over inflation, as Apple shares rocketed higher after Warren Buffett increased his stake in the company.

The Dow Jones Industrial Average rose 1.4 per cent to close the week at 24,262.51.

The broad-based S&P 500 gained 1.3 per cent to end at 2,663.42, while the tech-rich Nasdaq Composite Index advanced 1.7 per cent to 7,209.62.

The US economy added 164,000 jobs in April, which was below expectations. But the unemployment rate fell to 3.9 per cent, the lowest since December 2000.

Investors were cheered by signs inflation remained tame, as average hourly wages rose just 0.2 per cent. That figure was seen as reducing the odds the Federal Reserve will accelerate interest rate hikes.

"We don't see anything suggesting the Fed needs to be more aggressive with monetary policy and nothing to stop them from continuing to normalise it," said Matt Miskin, market strategist at John Hancock Financial Services.

Apple shot up 3.9 per cent after Warren Buffett's Berkshire Hathaway bought an additional 75 million shares of the technology giant, lifting Berkshire's overall stake to around five per cent.

Beyond Apple, gains were fairly broad-based. All 11 sectors in the S&P 500 advanced, with technology leading and consumer goods, financials, industrials and materials all rising more than one per cent.

A note from JPMorgan Chase recommended investing in equities after a market pullback since late January left stocks "meaningfully lower." "Although politics and trade war concerns are still a significant overhang, the worst of uncertainty and political risks might be behind us," JPMorgan said in the note.

But Mr Miskin of John Hancock predicted the market would "remain against the ropes" in spite of positive fundamental news, including good earnings.

"Generally, we're seeing a lack of risk taking preventing a more sustained upside breakout," he said in a note.

"We think investors are wary about the surge in volatility to start the year, concerned about global trade negotiations, and debating whether we may have just witnessed the best of investing times in the cycle."

AFP