U.S. Stocks Holding On To Strong Gains In Mid-Day Trading

(RTTNews) - After moving higher early in the session, stocks have seen some further upside over the course of the trading day on Friday. With the advance on the day, the major averages are extending the strong upward move seen over the three previous sessions.

The major averages have pulled back off their best levels in recent trading but remain sharply higher. The Dow is up 266.00 points or 1 percent at 25,986.66, the Nasdaq is up 213.34 points or 1.6 percent at 7,738.89 and the S&P 500 is up 31.05 points or 1.1 percent at 2,874.54.

The continued strength on Wall Street seems to reflect optimism disappointing U.S. jobs data could spur the Federal Reserve to lower interest rates in the near future.

The Labor Department's closely watched monthly jobs report released before the start of trading showed a substantial slowdown in the pace of U.S. job growth in the month of May.

The report said non-farm payroll employment rose by 75,000 jobs in May after soaring by a downwardly revised 224,000 jobs in April.

Economists had expected employment to increase by about 185,000 jobs compared to the jump of 263,000 jobs originally reported for the previous month.

Meanwhile, the unemployment rate came in at 3.6 percent in May, unchanged from the previous month and in line with economist estimates.

"The soft 75,000 gain in non-farm payrolls in May wasn't quite as bad as the dismal ADP employment reading earlier this week but, along with the downward revisions to previous months, it is another sign that economic growth is slowing," said Andrew Hunter, Senior U.S. Economist at Capital Economics.

He added, "On balance, we still think Fed officials will want to see evidence of more sustained weakness before taking action, but we are increasingly convinced that the Fed will begin cutting interest rates later this year."

The markets have recently benefited from optimism about a potential interest rate cut after Fed Chairman Jerome Powell pledged to act "as appropriate" to sustain the economic expansion.

Sector News

Software stocks continue to turn in some of the market's best performances in mid-day trading, driving the Dow Jones U.S. Software Index up by 2.2 percent.

The software index continues to rebound after ending Monday's trading at its lowest closing level in well over two months.

Significant strength is also visible among retail stocks, as reflected by the 1.5 percent gain being posted by the Dow Jones U.S. Retail Index.

Bookseller Barnes & Noble (BKS) is posting a standout gain after agreeing to be acquired by Elliott Advisors in an all-cash transaction valued at approximately $683 million.

Tobacco, pharmaceutical, and healthcare stocks are also seeing considerable strength, moving higher along with most of the other major sectors.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved mostly higher on Friday, with several major markets closed for holidays. Japan's Nikkei 225 Index climbed by 0.5 percent, while Australia's S&P/ASX 200 Index jumped by 1 percent.

The major European markets also moved to the upside on the day. While the French CAC 40 Index spiked by 1.6 percent, the U.K.'s FTSE 100 Index surged up by 1 percent and the German DAX Index advanced by 0.8 percent. In the bond market, treasuries have pulled back off their best levels but remain firmly positive. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 3.6 basis points at 2.088 percent.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.