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The close: Dow rises more than 300 points in bumpy end to brutal week

U.S. stocks posted sharp gains on Friday, giving investors some solace after a week of huge swings that shook the market out of months of calm that saw the market rise steadily.

The Dow Jones Industrial Average rose 330.44 points, or 1.4 per cent, to 24,190.90, the S&P 500 gained 38.55 points, or 1.50 per cent, to 2,619.55 and the Nasdaq Composite added 97.33 points, or 1.44 per cent, to 6,874.49.

Even with Friday's gains, the benchmark S&P 500 fell 5.2 per cent for the week, its biggest weekly percentage drop since January, 2016, as volatility spiked back up.

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During Friday's session alone, the S&P 500 swung from as high as up 2.2 per cent to down 1.9 per cent, echoing the big swings of the past week. The Dow moved in a range of more than 1,000 points. This week, the Dow has travelled about 20,000 points this week as it gyrated wildly between positive and negative territory.

The fresh volatility came a day after the benchmark S&P 500 and the Dow industrials confirmed they were in correction territory, both falling more than 10 per cent from Jan. 26 record highs.

Friday's session marked the latest day of sharp swings in the past week that have pulled stocks lower after a steady climb for months to record highs.

"I don't think the market is focused on fundamentals at all," Anwiti Bahuguna, senior portfolio manager at Columbia Threadneedle Investments in Boston. "It's very volatile."

The S&P 500 and Dow both registered their biggest weekly percentage drop since January, 2016, while the Nasdaq posted its biggest weekly decline since February, 2016.

Canada's main stock index fell on Friday, closing at its lowest level for five months reflecting weakness in mining stocks as gold futures and copper prices declined and as domestic data showed the economy lost the most jobs in nine years. But it rebounded slightly as the Dow gained ground near the close.

The Toronto Stock Exchange's S&P/TSX composite index closed down 31.15 points, or 0.21 per cent, to 15,034.46.

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Energy stocks were down 0.05 per cent as oil prices dipped, while materials stocks fell 1.1 per cent.

The fresh volatility came a day after the benchmark S&P 500 and the Dow industrials confirmed they were in correction territory, both falling more than 10 per cent from Jan. 26 record highs. On Friday, the intraday low for the tech-heavy Nasdaq also pulled it more than 10 per cent from its recent peak.

Friday's session marked the latest day of sharp swings in the past week that have pulled stocks lower after a steady climb for months to record highs.

"I just think the market has to find new footing here," said Peter Tuz, president of Chase Investment Counsel in Charlottesville, Virginia. "We are in very sloppy territory, until we're not in sloppy territory."

In the U.S., technology was among the best performing groups. Energy shares lagged as oil prices tumbled.

The Dow Jones Transport Average index was dragged down by shares of package delivery companies FedEx and United Parcel Service after a report said Amazon.com is preparing to launch a delivery service for businesses.

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The sharp selloff in recent days was kicked off by concerns over rising inflation and bond yields, sparked by last week's January U.S. jobs report.

Equities for years have looked relatively attractive compared to the low yields offered by bonds, but the rise in Treasury yields has diminished the allure of stocks, especially with stock valuations at historically expensive levels.

The yield on benchmark 10-year U.S. Treasuries hovered around 2.82 per cent after touching a four-year peak of 2.885 per cent on Monday.

"That's part of this recalculation that has gone on in the market: How do we factor in higher bond yields?" said Willie Delwiche, investment strategist at Baird in Milwaukee. "And that is a process that is playing out."

The S&P 500 lost $2.49-trillion in market value since Jan. 26 through Thursday, according to S&P Dow Jones Indices.

Volatility remained high compared to recent months. The market's main gauge of volatility, the CBOE Volatility Index , hovered around 34 on Friday, about three times the average level of the past year. It ended the day at 29.06, down 4.4 points.

The Canadian dollar was little changed against its U.S. counterpart on Friday at 79.46 US cents, rebounding from an earlier six-week low, as gains for U.S. stocks offset the biggest decline in domestic jobs in nine years.

The decrease of 88,000 Canadian jobs was unexpected, against economists' forecasts for a gain of 10,000, and made for the biggest decline since January 2009.

Still, all the job losses were part-time, as full-time jobs rose 49,000. The economy added jobs last year at the fastest pace since 2002.

"It's certainly another reason for the Bank of Canada to bide its time and probably wait until July before raising interest rates again," said Sal Guatieri, senior economist at BMO Capital Markets.

"There's a lot of concerns about trade protectionism ... and the impact of new mortgage rules on our housing market."

In Toronto, the materials index fell 1 per cent as gold stocks fell. Goldcorp dropped 2.3 per cent and Kinross Gold was off 2 per cent.

Consumer discretionary stocks slipped 0.8 per cent, with Canada Goose down 4.5 per cent and Dollarama off 3.25 per cent.

Energy stocks were down 0.05 per cent as oil prices dipped. Cenovus Energy was off nearly 5 per cent and Encana dropped 3.5 per cent.

Reuters

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