Bullish indicating open at $55-$60, IPO prices at $37
* Fed's Powell speaks in Zurich
* China's central bank announces stimulus policy
* U.S. jobs data disappoints
* The dollar edges lower
* Crude prices on track for weekly gain
(Updates to afternoon)
By Stephen Culp
NEW YORK, Sept 6 (Reuters) - Wall Street advanced on Friday
and Treasury yields pared their losses as upbeat remarks from
Federal Reserve chair Jerome Powell and a Chinese economic
stimulus package helped investors shrug off a
weaker-than-expected U.S. jobs report.
The week began with a flight to safety driven by trade
jitters and weak U.S. manufacturing data, but positive
geopolitical developments in Britain, Hong Kong and Italy, along
with news that U.S.-China trade talks would continue, put market
participants in a risk-on mood.
That mood was given a further lift by China's central bank,
which said that in order to bolster the nation's weakening
economy it would lower the amount of cash that banks must hold
as reserves, resulting in additional liquidity to the tune of
900 billion yuan ($126.35 billion). "For the next few weeks, market direction is going to be
determined by macroeconomic and geopolitical headlines," said
Joseph Sroka, chief investment officer at NovaPoint in Atlanta.
"Until we get into October and there's solid company data again,
the market's going to be gyrating based on headlines."
But risk appetite was curbed after the U.S. non-farm
payrolls report showed an increase of 130,000 jobs in August,
fewer than analysts expected. The underwhelming data provided another possible sign that
the longest-ever period of U.S. economic expansion is losing
steam and increased the likelihood that the Federal Reserve will
cut interest rates when it meets later this month.
"The jobs report gave enough weakness for the Fed to cut 25
basis points this month, but not enough that they would start
flashing a recession warning," Sroka added.
Indeed, Powell called the jobs report consistent with a
quite strong labor market, in remarks made at a panel discussion
in Zurich, adding that despite trade uncertainties he does not
foresee or expect a U.S. recession.
The Dow Jones Industrial Average .DJI rose 120.6 points,
or 0.45%, to 26,848.75, the S&P 500 .SPX gained 7.6 points, or
0.26%, to 2,983.6 and the Nasdaq Composite .IXIC added 10.53
points, or 0.13%, to 8,127.36.
European and emerging markets extended their gains as
China's stimulus announcement outweighed the disappointing
economic data from the United States and also from Germany.
The pan-European STOXX 600 index .STOXX rose 0.32% and
MSCI's gauge of stocks across the globe .MIWD00000PUS gained
0.34%.
Emerging market stocks rose 0.63%. MSCI's broadest index of
Asia-Pacific shares outside Japan .MIAPJ0000PUS closed 0.72%
higher, while Japan's Nikkei .N225 rose 0.54%.
U.S. Treasury yields pared their losses and were essentially
flat following the Powell's remarks in Zurich.
Benchmark 10-year notes US10YT=RR last rose 5/32 in price
to yield 1.5483%, from 1.565% late on Thursday.
The 30-year bond US30YT=RR last rose 23/32 in price to
yield 2.0236%, from 2.054% late on Thursday.
The dollar also regained some ground lost against a basket
of major world currencies after the Fed chair spoke.
The dollar index .DXY fell 0.08%, with the euro EUR= up
0.03% to $1.1036.
The Japanese yen strengthened 0.10% versus the greenback at
106.86 per dollar, while sterling GBP= was last trading at
$1.2299, down 0.24% on the day.
Powell's remarks also sent crude prices into positive
territory after spending much of the session in the red.
U.S. crude CLcv1 rose 0.25% to $56.44 per barrel and Brent
LCOcv1 was last at $61.46, up 0.84% on the day.
Gold initially gained ground on the heels of
weaker-than-expected labor market data, but has since reversed.
Spot gold XAU= dropped 0.6% to $1,510.40 an ounce.
Copper CMCU3 lost 0.18% to $5,834.50 a tonne.
Three-month aluminum on the London Metal Exchange CMAL3
lost 0.06% to $1,783.00 a tonne.