FED Dovish for 2019..reverse?

SP:SPX   S&P 500 Index
Stocks rallied on Friday after Federal Reserve Chairman Jerome Powell said the central bank will be patient in raising rates.

The Dow Jones Industrial Average rose 602 points — 2.7 percent — as Boeing , UnitedHealth and 3M outperformed. The S&P 500 rallied 2.7 percent, with the tech sector gaining more than 2.5 percent. The Nasdaq Composite climbed 3.2 percent.

Powell also said the central bank would not “hesitate” to change its balance-sheet reduction plan if it was causing problems. Fears that the Fed may be making a policy error by tightening too fast have contributed to the recent skittishness in financial markets, according to several market experts.

Gains in tech-related names also boosted stocks. Netflix and Intel rose 4.4 percent and 4.5 percent, respectively. Netflix rose after Goldman Sachs added the streaming service to its conviction buy list. Analyst Heath Terry called Netflix “one of the best risk/reward propositions in the Internet sector. ” Dow-member Intel rose after Bank of America Merrill Lynch upgraded it to buy from neutral.

The gains in Netflix and Intel also lifted other tech-related stocks. Facebook , Amazon, Apple and Google-parent Alphabet all rose more than 2 percent. The Technology Select Sector SPDR fund, which tracks the S&P 500 tech sector, gained 2.3 percent.

Tech’s move higher took place after the sector fell 5.07 percent on Thursday, its worst daily performance since Aug. 18, 2011, when it fell 5.35 percent. The sharp move lower was triggered by a dire quarterly warning from Apple , which propelled the tech giant’s stock to its worst day in six years and dampened market sentiment across the world. Apple slashed its fiscal first-quarter revenue guidance earlier this week, citing an unexpected slowdown in China.

The announcement comes as China and the U.S. try to strike a deal on trade. China’s commerce ministry said the U.S. and Chinese would hold vice-ministerial level negotiations over trade in Beijing on Jan. 7-8. Trade-related names like Caterpillar and Boeing rose 3.2 percent and 2.4 percent, respectively.

Friday’s gains also come after the release of stronger-than-expected employment data. The U.S. economy added 312,000 jobs last month, much more than the expected 176,000.

The data propelled Treasury yields to their session highs, with the 10-year yield trading around 2.62 percent. It also raised concern of potentially more tightening from the Federal Reserve . But JJ Kinahan, chief market strategist at TD Ameritrade, said the report helps dispel some of the lingering concerns about a global economic slowdown.

“We created jobs across the board; I don’t think most of it was seasonal ,” Kinahan said. “But the most interesting thing on this report was the amount of people who left their jobs voluntarily. I think that’s a really good consumer-confidence measure.”

“As much as we all got nervous about Apple yesterday … this puts a counter to that,” he added.

Investors will also be keeping an eye on a speech by Federal Reserve Chair Jerome Powell at 10:15 a.m. ET. Powell will take part in “Federal Reserve Chairs: Joint Interview” panel on monetary policy and central banking at the American Economic Association and Allied Social Science Association annual meeting in Atlanta , Georgia.

—CNBC’s Silvia Amaro contributed to this report.
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