The Dow jumps 300 points on Friday after a solid August jobs report, paring losses for the week

The job figures do not indicate a soft landing, says Roger Ferguson

Stocks rose on Friday, paring losses for the week, as August’s jobs report came in about as expected. The data eased fears that a warmer labor market would give the Federal Reserve room to be more aggressive with its rate hikes.

The Dow Jones Industrial Average rose 335 points, or 1.1 percent. The S&P 500 advanced 1.2% to climb back above the 4,000 level, after dipping below it earlier this week for the first time since July. The Nasdaq Composite rose 1.3%, snapping a five-day losing streak.

The major averages are still set to end the week lower, and have a third negative week in a row after falling in the last days of August. The Dow has pared its week-to-date decline to just under 1%. The S&P and Nasdaq are on track to close the week lower by 1% and 1.8% respectively.

Investors were comforted by the much-anticipated jobs report, which showed the economy added 315,000 jobs for the month, just below the Dow Jones estimate of 318,000. Steve Sosnick, chief strategist at Interactive Brokers, called it a “Goldilocks” report.

“Not too hot. Not too cold. It’s right around expectations. There’s nothing here that takes 75 [basis points] off the table,” he said. “A number that’s within expectations doesn’t change anything. What we are seeing now is a relief turnout.”

Unemployment rose to 3.7%, two tenths of a percentage point higher than expected. The August report is particularly important because it is one of the last major economic reports the Fed will weigh before raising interest rates at its September meeting. This data point can help the central bank decide on an increase of 75 basis points.

The last major economic report is the August CPI on September 13, and that is more likely to determine how aggressive the Fed needs to be in the near term.

Stocks have been weighed down by hawkish comments from Federal Reserve officials signaling interest rate hikes aren’t going away anytime soon. Now traders are watching to see if stocks will retest the June lows, especially since September is historically a bad month for the market.

Shares of retailer Lululemon rose nearly 10% after reporting quarterly results that beat Wall Street expectations.

— CNBC’s Patti Domm contributed reporting.

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