Stocks extend gains on strong job creation, trade progress

U.S. stocks jumped Thursday following better-than-expected jobs data and news that American and Chinese trade negotiators have set another round of talks for next month.

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Private employers added 195,000 jobs in August, according to the latest ADP National Employment Report, surging past analyst expectations of 149,000 even as recession fears continue to mount. Most hiring took place in the service-providing sector, with 184,000 new jobs created. Manufacturing hiring remained fairly steady, with 8,000 jobs added.

TickerSecurityLastChangeChange %
I:DJIDOW JONES AVERAGES27691.49+0.00+0.00%
SP500S&P 5003091.84+4.83+0.16%
I:COMPNASDAQ COMPOSITE INDEX8486.09056+21.81+0.26%

Meanwhile, Chinese and U.S. officials said negotiators would work together this month to lay the groundwork for an October meeting after the two economies had moved to impose tariffs on each other. Beijing said it hopes for “substantive progress” during talks next month.

Jim Paulsen, chief investment strategist at the Leuthold Group, said, “I think there’s going to be a deal at some point” between U.S. and China," according to Dow Jones.

President Trump celebrated the "really good jobs numbers"  in a tweet:

The data bodes well for the employment report due on Friday. Employers are expected to have created 158,000 jobs in August, slightly less than the prior month. The unemployment rate is expected to hold steady at 3.7 percent, according to Refinitiv estimates.

Market analysts greeted the numbers as confirmation of the underlying economy's basic strength.

"Hiring continues to be strong enough to absorb new entrants to the labor force, and wages continue to rise," Brad McMillan, chief investment officer for Commonwealth Financial Network, said.

"People have money to spend. And, with confidence still at very high levels, they are willing to spend it. We see evidence of this ability in the better-than-expected retail sales and consumer spending data. Consumers are more than two-thirds of the economy. When they are able and willing to spend, a recession is still a ways away. This spending is the underlying strength in the U.S. economy that has kept pulling markets back up even as the headlines knock them down, as we saw in August.

TickerSecurityLastChangeChange %
GMGENERAL MOTORS COMPANY38.59-0.13-0.34%
WORKSLACK TECHNOLOGIES INC.20.70+0.57+2.83%

As for stocks in focus, General Motor shares rose as CEO Mary Barra heads to the White House to meet with President Trump. The two are expected to discuss trade and jobs among other issues.

In earnings news, Slack is getting slammed after reporting a bigger-than-expected loss while also indicating growth would likely slow in the second half of the year.

Easing of tensions in Hong Kong also boosted markets as Hong Kong leader Carrie Lam withdrew an extradition bill that had led to months of violent protests.

In Europe, London's FTSE traded lower by 0.6 percent, the German Dax added 0.9 percent and France's CAC traded up by 0.9 percent.

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FOX Business' Ken Martin contributed to this report.