U.S. stocks closed higher Friday, shaking off pressure from low oil prices, after encouraging data on domestic employment and manufacturing.
“I think the combination of a solid jobs report and better manufacturing has helped the market move higher,” said Kate Warne, investment strategist at Edward Jones.
The Dow Jones industrial average closed up about 107 points at its highest since Dec. 4, 2015. (Tweet This) Goldman Sachs contributed the most to gains, while Chevron and Exxon Mobil contributed the most to declines on the index, which fell as much as 117 points in morning trade.
U.S. crude oil futures settled down $1.55, or 4 percent, at $36.79 a barrel to wipe out gains for the year so far.
Biotech stocks outperformed, with the iShares Nasdaq Biotechnology ETF (IBB) (IBB) closing up 2.88 percent and topping its 50-day moving average for the first time in 2016. Regeneron (REGN) surged to close up 12.43 percent, off session highs but still posting its best day since Jan. 10, 2012.
Regeneron and Sanofi said Friday their experimental treatment for eczema proved highly effective in two large studies, without serious side effects often seen with standard treatments for the chronic inflammatory skin disease, Reuters reported.
“This marks potentially the first in a new class for a drug/disease type,” said Paul Yook, portfolio manager, BioShares Funds.
The major averages turned higher after ISM manufacturing for March came in at 51.8, topping expectations and up from February’s 49.5 print.
The “ISM number was much better than expected,” said Peter Coleman, head trader at Convergex.
“We’ve been in an uptrend for a while here. I think people … want to put money to work,” he said.
U.S. stocks initially opened lower despite an encouraging March jobs report.
“I think there’s a lot of uncertainty about earnings, global growth and the timing of the Fed’s next move,” Warne said. “While it’s been a nice rebound from the uncertainty early this year, markets remain volatile.”
WTI hit its lowest level in more than two weeks on renewed oversupply concerns, after reports that Saudi Arabia would not agree to a production freeze unless Iran and other major producers also did so. The weekly oil rig count showed a decline of 10, according to Baker Hughes.
The decline in oil prices and overnight sell-off in some major overseas stock indexes on disappointing Japanese data initially weighed heavily on U.S. equities in the open. Traders also attributed part of the morning decline in stocks to beginning-of-quarter flows.
“You started out with Japan and Europe overnight and that had us down initially. Also in reaction to this pretty good jobs number, it’s not consistent with the testimony (Fed Chair) Janet Yellen gave this week and her dovish tilt. The fact that the Fed is speaking out of both sides of its (mouth) has the market just going off the data,” said Michael O’Rourke, chief market strategist at JonesTrading.
Treasury yields held mixed, with the 30-year a touch lower around 2.60 percent, while the 2-year yield (U.S.:US2Y) held higher near 0.75 percent and the 10-year yield (U.S.:US10Y) up around 1.78 percent.
The U.S. dollar index ended flat on the day after attempting gains following the U.S. jobs report. The index fell 1.55 percent for the week, its worst since early February. The index ended lower Thursday for a four-day losing streak and falling 4.1 percent in the first quarter for its worst quarter since 2010.
The euro was near $1.139 and the yen was around 111.6 yen against the greenback.
“There’s a lot of confusion in the marketplace (about the Fed),” said John Caruso, senior market strategist at RJO Futures.
Gold futures for June delivery settled down $12.10 at $1,223.50 an ounce but still eked out a gain of 0.16 percent for the week, its first positive week in four.
Cleveland Fed President Loretta Mester, a voting member of the FOMC, said Friday afternoon it is appropriate to gradually raise rates, while policy will remain easy for some time as headwinds justify it.
She also said she reduced her rate hike path in March from December, and added the economy has shown considerable resiliency and recent inflation data has been somewhat encouraging.
In other economic news, February construction spending declined 0.5 percent. The final University of Michigan consumer sentiment read for March was 91.0. Earlier, the March U.S. Markit manufacturing PMI came in at 51.5.
“I think the data is showing this economy is not overly impressive but it’s still a nice trajectory,” said Rob Eschweiler, global investment specialist at JPMorgan Private Bank.
“The next direction for prices from here is now going to be contingent on the direction of earnings at this point,” he said.
Auto sales came in at a 16.57 million annualized rate in March, down from 17.54 million in February, according to Autodata.
General Motors (GM), Fiat Chrysler Automobiles (Milan Stock Exchange: FCA-IT) and other major automakers reported weaker-than-expected U.S. sales for March, hurt by declining demand for sedans and light dealer traffic during the Easter weekend, Reuters said. Shares of GM closed down 3 percent, while Fiat Chrysler ended nearly 4.1 percent lower.
Shares of Tesla soared 3.4 percent in above-average trade volume after CEO Elon Musk said orders for the Model 3 reached 198,000 within 24 hours.
Overseas, stocks were mostly lower. Japan’s Nikkei 225 (Nihon Kenzai Shinbun: .N225) plunged 3.55 percent Friday after the Bank of Japan’s quarterly “tankan” survey showed the headline index for big manufacturers’ sentiment stood at plus 6 in March, missing expectations and down from plus 12 seen three months ago, according to Reuters.
The Shanghai composite closed nearly 0.2 percent higher. China’s official PMI came in at 50.2 in March, up from 49.0 the prior month, while the Caixin manufacturing PMI for March rose to 49.7 from 48.0 in February. The official services PMI also rose to 53.8 in March.
European stocks ended lower but off session lows, with the STOXX Europe 600 off slightly more than 1 percent.
“It’s a combination of things (weighing on the U.S. market open). Europe and Asia, Japan specifically, has been down here,” said Jeremy Klein, chief market strategist at FBN Securities, noting recent weakness in the U.S. dollar index and the slide in oil as negative factors.
“You’re not going to have European equities down (sharply) and U.S. equities not being affected by that,” he said.
The March employment report showed creation of 215,000 jobs, with the unemployment rate edging up to 5.0 percent and average hourly earnings rising seven cents, according to Reuters. The labor force participation rate rose to 63 percent, its highest level since March 2014.
“It was good but it wasn’t good enough to stop the slide in the dollar. It’s not good enough to change the trend,” Klein said.
Dow futures briefly pared losses after the employment report, before falling more than 100 points.
With Friday’s gains, the major averages closed up more than 1.5 percent for the week, their sixth positive week in the last seven. The S&P 500 is within 3 percent of its 52-week intraday high, and the Dow about 3 percent below.
U.S. stocks closed narrowly mixed Thursday, the last trading day of the first quarter. The major averages gained more than 6 percent in March, their best month since October. The Dow and S&P 500 posted two-consecutive quarters of gains, more than recovering from an intra-quarter correction.
The S&P 500 gained 12.61 percent from its Feb. 11 low to its close on Thursday, March 31. The last time the index had at least as large a gain in the same timeframe was a 12.96 percent rise between Sept. 22 and Nov. 8, 2011, according to Howard Silverblatt, senior index analyst at S&P Dow Jones Indices.
High-frequency trading accounted for 49 percent of March’s daily trading volume of about 7.68 billion shares, according to TABB Group. During the peak levels of high-frequency trading in 2009, about 61 percent of 9.8 billion of average daily shares traded were executed by high-frequency traders.
The Dow Jones industrial average (Dow Jones Global Indexes: .DJI) closed up 107.66 points, or 0.61 percent, at 17,792.75, with Goldman Sachs leading advancers and Chevron the greatest laggard.
The S&P 500 (^GSPC) closed up 13.04 points, or 0.63 percent, at 2,072.78, with health care leading eight sectors higher and telecommunications and energy the only decliners.
The index rose 1.81 percent for the week with information technology outperforming and energy the only decliner on the week.
The Nasdaq (^IXIC) composite closed up 44.69 points, or 0.92 percent, at 4,914.54.
The Nasdaq gained 2.95 percent for the week. Apple had a weekly gain of nearly 4.1 percent.
The CBOE Volatility Index (VIX) (^VIX), widely considered the best gauge of fear in the market, hit a fresh low for the year so far and ended just above 13.
Decliners were a step ahead of advancers on the New York Stock Exchange, with an exchange volume of 967 million and a composite volume of nearly 3.7 billion in the close.
—CNBC’s Patti Domm and Reuters contributed to this report.
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