Wall Street Opens Higher; Labor Market Cooling

(AP) -- Stocks are broadly higher on Wall Street in morning trading Friday after the government reported that U.S. job growth increased at a healthy, but more moderate pace last month. The report supports investors' hopes that the Federal Reserve will hold off on raising interest rates again in its bid to lower inflation.

The S&P 500 was up 0.5%. The benchmark index is coming off its first monthly loss since February, but is on pace for its second straight weekly gain.

The Dow Jones Industrial Average rose 186 points, or 0.5%, to 34,906 as of 10:24 a.m. Eastern. The Nasdaq composite gained 0.3%.

The Labor Department reported Friday that employers added a solid 187,000 jobs in August. The job growth marked an increase from July's revised gain of 157,000, but still pointed to a moderating pace of hiring compared with earlier this year. From June through August, the economy added 449,000 jobs, the lowest three-month total in three years.

The report also showed that the unemployment rate rose from 3.5% to 3.8%, the highest level since February 2022, though still low by historical standards.

Wall Street welcomed the latest monthly labor market snapshot, as it roots for the economy to show signs of lower inflation and cooling job growth so that the Fed will be able to ease up on its rate hike campaign.

"If the economy can continue to expand and the labor market can cool at a slow pace, rather than at a rapid clip, then the Fed can afford to leave rates where they are and patiently wait for (current) higher rates to do their work," said Chris Zaccarelli, chief investment officer for Independent Advisor Alliance.

The strong job market, along with consumer spending, has so far helped thwart a recession that analysts expected at some point in 2023. But they also made the central bank's task of taming inflation more difficult by fueling wage and price increases.

Market jitters over the possibility that the Fed might have to keep interest rates higher for longer -- following reports showing the U.S. economy remains remarkably resilient -- led to the market's pullback in August after what had been a banner year.

The central bank has raised its main interest rate aggressively since 2022 to the highest level since 2001. The goal has been to rein inflation back to the Fed's target of 2%. The Fed has maintained that it is ready to keep raising interest rates if it has to, but will base its next moves on the latest economic data.

Bond yields were mixed. The yield on the 2-year Treasury, which tracks expectations for the Fed, edged lower to 4.84% from 4.87% late Thursday. The yield on the 10-year Treasury, which influences interest rates on mortgages and other consumer loans, rose to 4.16% from 4.11%.

Health care stocks and banks accounted for a big share of the gains among S&P 500 companies in the early going Friday. AbbVie rose 1.2%, Wells Fargo added 1.4%.

Communications stocks were among the laggards.

Broadcom reported third-quarter earnings and revenue growth, but its shares fell 4.6% amid worries over slowing momentum in its storage and broadband businesses.

Disney dropped 2.9% after the entertainment giant pulled its programming from Charter Communication's Spectrum TV after the companies failed to come to terms on a new distribution deal. Charter was down 2.2%.

Several companies rose sharply after reporting solid quarterly earnings.

Dell jumped 22.2% after its fiscal second-quarter earnings and revenue topped Wall Street estimates. Nutanix gained 13.9% after reporting better-than-expected results.

Walgreens Boots Alliance ticked down less than 1% after the company announced that CEO Rosalind Brewer was stepping down at the end of the month and that Ginger Graham would take over as interim CEO.

Energy stocks also rose as the price of U.S. crude oil climbed 1.8%, extending its weekly gain to 6.7%. Exxon Mobil rose 1.6% and Chevron was up 1.8%.

The rise in oil prices comes as production cuts by major producers continue to prop up the market. Many industry analysts are expecting to Saudi Arabia to extend those cuts through October.

Earlier this month, Saudi Arabia said it would extend its unilateral production cut of 1 million barrels of oil a day through the end of September in its effort to boost flagging energy prices. The Saudi cut of 1 million barrels per day, which began in July, came as the other OPEC+ producers have agreed to extend earlier production cuts through next year.

Since Saudi Arabia's July cut -- which amounts to about 10% of its daily output -- oil prices are up nearly 20%.

Stocks in Europe were mostly lower. Markets in Asia ended mixed.

Trading was halted in Hong Kong because of an approaching typhoon. Schools and businesses were shut as an official warning was issued about Super Typhoon Saola. Hundreds of flights were canceled or delayed.