The Dow Jones Industrial Average soared 700 points in the latest twist in a wild three months for markets. "We continue to believe Netflix's investment in content, technology and distribution will continue to drive subscriber growth well above consensus expectations both in the USA and internationally".
USA stocks suffered another day of volatile declines, with the Dow Jones Industrial Average falling 660 points, or almost 3%, as Apple's warning that revenue in the busy holiday quarter would be weaker than expected amplified concerns about a global economic slowdown.
Most overseas markets rose after China's Commerce Ministry said trade talks between the USA and China will be held Monday and Tuesday in Beijing. The U.S. economy added 312,000 jobs last month, much more than the expected 176,000. They fell even further after a weak manufacturing report suggested the trade war was harming both China and the United States' economy.
Apple is now the highest-profile multinational corporation to warn that the economic slowdown in China could hurt its business.
Analysts at Macquarie Capital said that the rate cut shows government efforts to support the economy have now moved to the "second level" and should signal to investors that more stimulus is in the pipeline.
"It's hard to square recession worries with the strongest job growth we've seen in years", said Alec Young, managing director of global markets research for FTSE Russell.
Stocks rose even further after Federal Reserve Chairman Jerome H. Powell said the central bank will be flexible in deciding if and when it raises interest rates. "The Fed understands that what they attempted to communicate last month was inartful, that they didn't get the right message across, and Powell tried to reset".
The Dow fell 660.02 points, or 2.8%, to 22,686.22. Eastern time, more than wiping out Thursday's loss. Earlier it gained as much as 832.
On Thursday, the shares of US companies with heavy Chinese presence like Boeing, Caterpillar, GM and Qualcomm shed 3.99 percent, 3.92 percent, 4.16 percent and 2.96 percent, respectively.
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Trader Gregory Rowe works on the floor of the New York Stock Exchange, Friday, Jan. 4, 2019.
USA stock index futures fell sharply on Thursday after Apple Inc stunned investors with its first sales warning in more than a decade, deepening fears about a slowdown in China's economy and its impact on corporate profits. Other big exporters including technology and machinery companies also took big losses.
In the past, China, the world's second largest economy after the U.S., imposed tit-for-tat tariffs on billions of dollars worth of American imports.
A team led by Deputy US Trade Representative Jeffrey Gerrish will travel to China for talks, China's commerce ministry and USTR said.
Technology companies, banks, health care and industrial companies all made strong gains. Retailers and internet companies rose as well, with Amazon up 2.4 per cent at $1,536 and Google's parent company, Alphabet, rising 2.3 per cent to $1,048. The Dow has now surged 1,641 points, or 8%, since Christmas Eve. Most of the companies in those industries stand to do better in times of faster economic growth.
Apple issued a rare revision to its earnings guidance earlier this week, cautioning investors that the company is anticipating to generate a few billion dollars less in revenue than initially expected. Only 16 of the stocks in the S&P 500 index were negative.
Thursday's declines were also a result of concern among investors over the largest one-month decline in USA factory activity since the Great Recession. Japan's Nikkei returned to trading after a public holiday to drop 2.3% in a delayed reaction to losses across global markets earlier in the week. Then again, with the political environment being what it is today, we can't realistically say that it's all that surprising. "There's mounting evidence we're going to see a slowdown", albeit not a severe one.
The announcement, after the market closed on Wednesday, sent shares down 10 per cent on Thursday - the company's worst day in about six years. That helps banks, as higher interest rates allow them to make bigger profits on mortgages and other loans.
The price gap is one reason Huawei surpassed Apple in smartphone sales from April through September past year to seize the No. 2 spot behind industry leader Samsung, according to the research firm International Data Corp.