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Why worry? Jobs report fuels relief rally

The real fear factor for stocks

Stronger job growth in September should allay concerns that economic expansion could be cooling, and reinforces the view that the Fed is on track to begin raising interest rates next year.

Stock futures rallied off earlier gains, and Treasury yields held at higher levels, while the dollar rose on the report that 248,000 nonfarm payrolls were added in September. The unemployment rate fell to 5.9 percent, under 6 percent for the first time since 2008.

August payrolls were revised higher to 180,000, up 38,000, and closer to the 12-month average of 213,000.

Read MoreWhew! Jobs report shows rebound

"We're still in the mode that the economy is creating 200,000 jobs a month and that keeps the Fed on pace to tighten in the middle of next year," said John Canally, market strategist and economist at LPL Financial. "That should help to calm the nerves that the economy is weakening. ... It reinforces the economy is doing just fine."

Canally said he had many calls from investors this week, worried that the economy was faltering as stocks sold off.