Wall Street ended a choppy week of trading with a broad rally that drove the Dow Jones Industrial Average more than 370 points higher. The gains Friday also gave the S&P 500 its best day in seven weeks, though the benchmark index still finished with its third straight weekly loss. The job market data for September showed the U.S. unemployment rate dropped to a five-decade low and employers were adding jobs at a healthy clip.
The S&P 500 rose 1.4% to 2,952.01. The index finished the week with a 0.3% loss. The Dow climbed 1.4% to 26,573.72. The Nasdaq composite also gained 1.4%, to 7,982.47. The Russell 2000 index of smaller company stocks rose 1% to 1,500.70.
A strong jobs market would enable U.S. households to keep spending, supporting the economy at a time when slowing growth abroad poses a threat and President Donald Trump's trade war with China is sapping exports and manufacturing.
The world's two largest economies are set to talk again this week about trade. Markets have been quick to swing on any hint of movement in their dispute, which has dragged on manufacturing around the world, including Asia, and pushed CEOs to delay investments amid uncertainty.
Robert Carnell, chief economist and head of research Asia-Pacific at ING, noted some optimism about the trade talks but warned that past optimism was often misplaced. "It looks as if we are back to considering the merits of a narrow trade deal today, as news stories break suggesting that China is not looking to make a broader trade deal along the lines it is reported the U.S. is seeking," he said.
CHINA'S RESERVES: China's foreign currency reserves declined more than expected, prompting suggestions Beijing might have bought yuan to support the Chinese currency's exchange rate ahead of trade talks with Washington. The reserves, the world's biggest, fell by $14.8 billion to just under $3.1 trillion in September. The yuan was allowed to tumble to an 11-year low against the dollar in August but has stabilized since then. Washington complains Beijing depresses its exchange rate to make Chinese exports less expensive abroad, hurting foreign competitors. If Beijing is selling foreign currency, then the yuan's stability might reflect "intervention following the resumption of U.S.-China trade talks," said Martin Lynge Rasmussen of Capital Economics in a report.
ENERGY: Benchmark U.S. crude added 11 cents to $52.92 a barrel. It rose 36 cents to settle at $52.81 per barrel Friday. Brent crude, the international standard, rose 4 cents to $58.41 per barrel. CURRENCIES: The dollar edged up to 106.90 Japanese yen from 106.77 yen Friday. The euro strengthened to $1.0976 from $1.0979.
AP Business Writer Joe McDonald in Beijing contributed.