The craziness continues.  The good news everyone was hoping for today did not happen.  The federal jobs report came in very poorly to the tune of a whopping 61,000 jobs below forecast.  How did the market takes this?  With absolute elation as the Dow soared 200 points, after initially dropping more than 250 points right out the gate.  As I said, craziness.  That's a 450 point swing we had today.  Plus investors are bracing for the worst Q3 in six years when earnings season begins next week.  Gee, where have I heard this before?  Oh yeah, Q1 and Q2!  In the face of all this bad news, why such a huge rally, basically wiping out all the losses of the last two weeks?  Simply that the bad news is a great harbinger of yet another hopeful delay in the Fed rate hike.  This is getting to be a very old song.  Wall Street really does have to decide whether it wants a recovery or not.  We continue this irrational environment where bad news becomes good news and vice versa.  But the objective bottom line is that the S&P now trades at 15.1 times earnings which, just slightly below the long-term median, means we're pretty much exactly where we should be.  With 8.3 billion shares, trading was considerably above the four week average.

Markets | Fri Oct 2, 2015 5:32pm EDT

Wall Street ends higher in sharp turnaround

BY NOEL RANDEWICH

DJ:  16,472.37  +200.36    NAS: 4,707.78  +80.69      S&P:  1,951.36  +27.54

(Reuters)  U.S. stock indexes jumped over 1 percent on Friday as worries about the economy after a disappointing jobs report gave way to a robust rally in energy and materials stocks.

The three major indexes clawed back losses of more than 1.5 percent as poor payroll data hinted at economic weakness while strengthening the argument for delaying a long-awaited interest rate hike.

The recently beaten-down S&P energy index .SPNY surged 4.01 percent following a rise in oil prices, while the materials index .SPLRCM jumped 2.41 percent.

"The silver lining with this disappointing jobs number is that possibly this could push the rate hike off to the first quarter of 2016," said Jake Dollarhide, chief executive of Longbow Asset Management in Tulsa.

Friday's strong performance follows over a month of turbulence in global markets that has seen the S&P lose 7 percent of its value over fears that troubles in China's economy could spread around the world.

Now, with the third-quarter earnings season starting next week, investors are starting to factor in what might be the biggest decline in profits for S&P 500 companies in six years.

Analysts on average expect third-quarter earnings to decline 4.2 percent, according to Thomson Reuters data.

"There are a lot of concerns that a weakening global economy may be impacting the U.S., so that certainly doesn't bode well for earnings," said Peter Cardillo, chief market economist at Rockwell Global Capital in New York.

"It's going to be a market where we're going to see more and more volatility and major support levels being tested," Cardillo said.

Non-farm payrolls rose by 142,000, far below the 203,000 economists had expected, and August and July figures were revised down. But the jobless rate held at 5.1 percent.

The report, the last before the Federal Reserve's meeting at the end of October, appeared to contradict Fed Chair Janet Yellen's comment last week that the economy was strong enough to withstand a rate hike this year.

Odds of a December rate hike fell to a little over 27 percent from 44 percent before the report.

Following a steep selloff since late August, the S&P 500 is trading at 15.1 times expected earnings, slightly below the long-term median of 15.6.

The Dow Jones industrial average .DJI rose rallied 1.23 percent to end at 16,472.37 points.  The S&P 500 .SPX gained 1.43 percent to 1,951.36. It bounced about 3 percent from its intra-day low to its closing level.  The Nasdaq Composite .IXIC jumped 1.74 percent to finish at 4,707.78.  For the week, the Dow and S&P both rose 1 percent. The Nasdaq added 0.5 percent.

Of the 10 major sectors, only the financial index .SPSY failed to advance on Friday.

Chevron (CVX.N) rose 4.10 percent and ConocoPhillips (COP.N) jumped 2.12 percent. Alcoa (AA.N) jumped 2.81 percent.

About 8.3 billion shares changed hands on U.S. exchanges, above the 7.25 billion average for the previous 20 sessions, according to Thomson Reuters data.

NYSE advancing issues outnumbered decliners 2,321 to 753. On the Nasdaq, 1,930 issues rose and 882 fell.

The S&P 500 index showed four new 52-week highs and 56 lows, while the Nasdaq recorded 13 new highs and 189 lows.