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Dow rallies 400 points after tech stock gains, strong jobs report

CNBC logo CNBC Fred Imbert

© Richard Drew/AP Photo   Stocks jumped on Friday as Netflix and Intel led a strong rebound in tech shares while Wall Street looked through a monster jobs report.

The Dow Jones Industrial Average rose 350 points as DowDuPont, Intel and Caterpillar outperformed. The S&P 500 gained 1.5 percent, with the tech sector gaining more than 1.5 percent. The Nasdaq Composite climbed 1.7 percent.

Netflix and Intel rose 3.5 percent and 2.8 percent, respectively. Netflix rose after Goldman Sachs added the streaming service to its conviction buy list. Analyst Heath Terry called Netflix "one of the best risk/reward propositions in the Internet sector." Dow-member Intel rose after Bank of America Merrill Lynch upgraded it to buy from neutral.

The gains in Netflix and Intel also lifted other tech-related stocks. Facebook, Amazon, Apple and Google-parent Alphabet all rose more than 1 percent. The Technology Select Sector SPDR fund, which tracks the S&P 500 tech sector, gained 1.7 percent.

Tech's move higher took place after the sector fell 5.07 percent on Thursday, its worst daily performance since Aug. 18, 2011, when it fell 5.35 percent. The sharp move lower was triggered by a dire quarterly warning from Apple, which propelled the tech giant's stock to its worst day in six years and dampened market sentiment across the world. Apple slashed its fiscal first-quarter revenue guidance earlier this week, citing an unexpected slowdown in China.

The announcement comes as China and the U.S. try to strike a deal on trade. China's commerce ministry said the U.S. and Chinese would hold vice-ministerial level negotiations over trade in Beijing on Jan. 7-8. Trade-related names like Caterpillar and Boeing rose 2.4 percent and 1.9 percent, respectively.

Friday's gains also come after the release of stronger-than-expected employment data. The U.S. economy added 312,000 jobs last month, much more than the expected 176,000.

The data propelled Treasury yields to their session highs, with the 10-year yield trading around 2.62 percent. It also raised concern of potentially more tightening from the Federal Reserve.

But JJ Kinahan, chief market strategist at TD Ameritrade, said the report helps dispel some of the lingering concerns about a global economic slowdown.

"We created jobs across the board; I don't think most of it was seasonal," Kinahan said. "But the most interesting thing on this report was the amount of people who left their jobs voluntarily. I think that's a really good consumer-confidence measure."

"As much as we all got nervous about Apple yesterday … this puts a counter to that," he added.

Investors will also be keeping an eye on a speech by Federal Reserve Chair Jerome Powell at 10:15 a.m. ET. Powell will take part in "Federal Reserve Chairs: Joint Interview" panel on monetary policy and central banking at the American Economic Association and Allied Social Science Association annual meeting in Atlanta, Georgia.

—CNBC's Silvia Amaro contributed to this report.

Related video: 312,000 jobs created in December, exceeding expectations



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