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Wall St. lifted by jobs data
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September 3, 1999: 10:17 a.m. ET
Stocks rally across the board amid easing inflation, interest-rate concerns
By Staff Writer Malina Poshtova Zang
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NEW YORK (CNNfn) - A strong rally lifted U.S. stock markets sharply Friday after the latest jobs data showed the economy produced fewer jobs in August and wages grew less than had been expected.
The report, suggesting the red-hot U.S. economy might be cooling off and wage inflation isn't a threat, sent bullish signals through financial markets, easing investors' fears that price pressures could push the Federal Reserve into another interest rate increase as early as next month.
The economy generated 124,000 non-farm jobs in August, about 100,000 fewer than economists had been forecasting. Average hourly earnings, the report's inflation gauge, grew 0.2 percent last month, half the growth rate the market had feared.
The news sent both stocks and bonds soaring and helped the limping dollar find some firm ground.
Shortly before 10 a.m. ET the Dow Jones industrial average was 188.38 points, or 1.7 percent, higher at 11,031.59. Advances trounced declines 2,019 to 322 on the New York Stock Exchange, where 103 million shares traded.
Volume was expected to taper off in the afternoon as many market players leave their positions early for a three-day holiday weekend. U.S. financial markets will be closed Monday for the Labor Day holiday.
The Nasdaq Composite opened with a gain of more than 2 percent and half an hour later soared 76.00 points, or 2.9 percent, to 2,810.24. The S&P 500 index advanced 28.45 points, or 2.2 percent, to 1,347.56.
The inflation-sensitive bond market also greeted the tame jobs report with a rally, with the bellwether 30-year Treasury bond surging 1-14/32 points in price, its yield sliding to 6.02 percent from Thursday's close at 6.13 percent.
The dollar, after days of losing ground against both the yen and the euro, regained composure and rose against both.
Banks, techs lead the surge
As usual, Wall Street's most interest-rate sensitive sectors, banking and technology, were the first to react and posted some of the strongest gains in what was otherwise a broad-based rally.
Lending is a major part of the business for banks and other financial services companies, while technology firms, known for their fast expansion rates, rely heavily on borrowing to cover growth costs.
Among the Dow's financial members, American Express (AXP) rose 3-3/4 to 139-5/8, Citigroup (C) gained 1-3/4 to 45-11/16 and J.P. Morgan (JPM) advanced 4-1/8 to 130-1/16.
The index's technology components followed a similar path, with IBM (IBM) climbing 3 to 128-7/8 and Hewlett Packard (HWP) adding 2-3/16 to 107-1/8.
Elsewhere in the tech sector, Microsoft (MSFT) rose 2-3/8 to 94-3/16, Intel (INTC) was up 2-11/16 to 88, Dell (DELL) advanced 1-5/16 to 49 and Cisco Systems (CSCO) climbed 2-3/16 to 70-7/16.
Internet stocks, a sector whose frantic pace of growth has been known to eat up earnings despite often triple-digit revenue growth, also cheered the jobs numbers. Shares of Amazon.com (AMZN) rallied 2-7/16 to 62-1/2, America Online (AOL) rose 3-7/16 to 94-11/16, CMGI (CMGI) added 3-1/4 to 83-3/8 and Yahoo! (YHOO) was up 6-1/4 to 147-13/16.
Profit warnings begin to creep in
But not all news was positive in the market, as some high-profile companies already began to issue profit warnings a month before the end of the third quarter.
Among the losers, shares of Dow component Coca-Cola (KO) tumbled 2 to 57-1/2 after the soft drink maker said third-quarter results won't meet expectations.
Coke's main rival, PepsiCo (PEP), saw its stock rise 1-1/8 to 34-11/16 after it too issued an earnings forecast after the closing bell Thursday. PepsiCo said its third-quarter operating profits will decline, but earnings per share would be higher due to strong performance at its Frito-Lay and Tropicana businesses. 
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