US stocks surge as investors digest August jobs data

Stocks rose sharply in morning trading on Wall Street
Friday as traders digested a report that showed employers slowed their hiring
in August, giving the Federal Reserve some room in how aggressively it hikes
interest rates later this month.

The S&P 500 was up 39.03 points or 0.98% at 4,005.88 as
of 10:29 a.m. Eastern time. The Dow Jones Industrial Average rose 255.70 or
0.88% at 31,912.12. The Nasdaq composite rose 103.80 points or 0.88% to
11,888.93. Smaller company stocks also gained ground, lifting the Russell 2000
index 1.2% higher.

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The key indexes remain on track to finish lower for the
week. In recent weeks, the market has erased much of the gains it made in July
and early August as traders are concerned that the Fed would not let up anytime
soon on hiking interest rates to bring down the highest inflation in four
decades.

On Friday, the Labor Department reported that the US
economy added 315,000 jobs last month, down from 526,000 in July and below the
average gain of the last three months. The unemployment rate rose to 3.7%, from
a half-century low of 3.5% in July, as more Americans came off the sidelines to
look for jobs and didn’t find work immediately.

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Average hourly pay rose 5.2% last month from a year earlier
but slowed marginally from July to August. That’s a positive sign in the
inflation battle, as businesses typically pass the cost of higher wages on to
their customers through higher prices.

According to the August jobs report, the Fed is making
progress on its target of cooling hiring and wage growth in order to curb
inflation. That could give the Fed reason to more moderately hike interest
rates at its next policy meeting later this month.

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The gains were significant in morning trading Friday, with
more than 90% of the stocks in the S&P 500 moving higher. Technology
stocks, which weighed on the market heavily most of this week, led much of the
gains. Broadcom rose 4.4%.

Energy stocks also gained as crude oil prices edged higher.
Marathon Oil jumped 3.5%.

Banks and big retailers also helped lift the market. Bank
of America added 2.6% and Lowe’s gained 1.2%.

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Treasury yields, which have been rising along with
expectations for higher interest rates, fell broadly. The yield on the 10-year
Treasury, which helps determine interest rates on mortgages and other consumer
loans, fell to 3.22% from 3.26% late Thursday. The two-year Treasury yield,
which tends to track expectations for Fed action, slipped to 3.43% from 3.52%.

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The latest jobs data comes a day after the Labor Department
reported unemployment claims declined last week in another sign of a strong job
market. It said earlier this week there were two jobs for every unemployed
person in July.