US open: Stocks rise following unemployment rate drop as oil prices slide

Markets rose on Friday as US non-farm payrolls beat consensus expectations while the unemployment rate came in lower than projected.

Early in the day the Dow Jones Industrial Average increased 1.84% to 17,907.87, the S&P 500 rose by 1.79% and Nasdaq ascended 1.94%.

US non-farm payrolls grew 252,000 month-on-month in December, beating the consensus expectation of 240,000 while the unemployment rate fell from 5.8% to 5.6%, below the 5.7% forecast.

However, not all of the figures impressed with average hourly earnings falling 0.2% over the month.

Senior US economist for Capital Economics Paul Dales added: “Overall, there has been a clear acceleration in job growth since last summer, a faster decline in the unemployment rate, but few signs of faster wage growth.

“If the activity data continue to improve, as we expect, then the Fed may not wait for wage growth to rise and could still raise rates as soon as March.”

Meanwhile, analysts at Barclays said: "We continue to forecast the first policy rate hike from the Fed in June of next year, with risks skewed in the direction of a later take-off.”

Crude futures fell with WTI down 0.5% at $48.55 a barrel, while Brent futures opened 1.2% lower at $50.34 a barrel.

CMC Markets market analyst Jasper Lawler said: “When assessing the likelihood of firms increasing prices to protect profit margins from increasing costs of production, namely cost-push inflation; oil prices at multi-year lows suggest it’s unlikely to come from raw materials.”

Over on COMEX, gold futures were advancing 0.5% to $1,214.20 an ounce while the dollar was prevailing against the pound, the yen and the euro.

The yield on a benchmark US 10-year Treasury fell one basis point to 2%.

Banking stocks were mostly lower early on with JPMorgan Chase, Well Fargo and Citigroup trading in the red.

A number of retailers were also under the weather with homewares seller Bed Bath & Beyond missing quarterly forecasts and department-store chain Macy's announcing a restructuring and cost-cutting programme.