US open: Stocks rebound after better-than-expected non-farms

US stocks rebounded after the non-farm payrolls report beat forecasts and the turbulence in Chinese equities subsided.

At 1435 GMT the Dow Jones Industrial Average rose 0.82%, the Nasdaq increased 1.08% and the S&P 500 gained 0.87%.

The non-farm payrolls report showed US employers added 292,000 jobs in December, smashing estimates of 200,000. November was revised to 252,000 from a previous estimate of 211,000.

The unemployment rate held at 5% last month, as expected.

However, average hourly earnings rose less than anticipated. Earnings grew 2.5% year-on-year in December, below forecasts for a 2.7% increase. On a month-on-month comparison, wages registered zero growth, missing estimates for a 0.2% gain.

“Once again the US has produced a strong labour market report for December but once again there was one important component that was lacking, wage growth,” said Craig Erlam, senior market analyst at Oanda.

“The lack of wage growth in the US has been an issue for a long time now but it has become increasingly significant over the last 12 months due to the Fed’s decision to embark on a rate hiking cycle, despite inflation being well below the central banks’ target rate.”

Meanwhile, Chinese stocks recovered from Thursday’s losses after regulators ended the “circuit breaker rule” and the People’s Bank of China set the daily yuan rate higher.

Trading in China was suspended after 30 minutes as equites on the CSI 300 index fell 7%, triggering the “circuit breaker rule”.

The new circuit breakers, which kicked in on Monday, have been criticised by analysts for exaggerating declines as investors rush to exit positions before getting locked in by the halts.

“Well after just four days the experiment appeared to fail with the China Securities Regulatory Commission deciding to suspend the mechanism…..in a bid to curb volatility. It's contributing to a better, although still volatile, start for markets in China this morning, but the uneasiness among investors remains high as each day brings about a new wave questions about government policy,” Deutsche Bank analysts said.

On another positive note for markets, China’s central bank set the daily yuan rate at 6.5646 per dollar - firmer than the previous day's rate, ending eight days of weakening the currency.

Oil prices also recovered from the previous day’s declines with Brent up 0.35% to $33.87 per barrel and West Texas Intermediate up 0.24% to $33.35 per barrel at 1441 GMT.

The dollar was up against all the major currencies, rising 0.35% against the pound, 0.66% against the euro and 0.42% against the yen. Spot gold was down 0.68% to $1,100.83.

In company news, Apple recovered following reports earlier in the week that iPhone 6S and 6S Plus production levels are being cut due to low demand.

FedEx Corp rallied after EU regulators approved its takeover of TNT Express.

Gap Inc. declined after the clothing retailer reported December sales fell 5% compared to last year.