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Stock market volatility: Dow jumps on jobs report, plunges, then rises again

Stock market gains early Friday morning were wiped out by noon, before another rally ensued. A better-than-expected jobs report gave some analysts hope that another recession could be averted.

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A pedestrian walks past the New York Stock Exchange on early Friday in New York. Stocks around the world tumbled ahead of crucial US jobs figures, continuing a losing streak reminiscent of the aftermath of the collapse of US investment bank Lehman Brothers in 2008.

Jin Lee/AP

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The US economy added more jobs in July than Wall Street economists had expected, giving an early-morning boost to the stock market Friday following the Dow Jones Industrial Average’s 512 point tumble on Thursday.

But the gain was short-lived. By noon Friday, the Dow appeared to resume its freefall of the day before, dropping more than 220 points – a downward swing of nearly 400 points after gaining 164 points at the opening of trading. Then news that Italy had agreed to fiscal reform – European fears had fueled Thursday's fall – resulted in a sharp rally on Wall Street on a day of extreme volatility.

It could have been worse if the economy had actually lost jobs.

“If the numbers had come in on the soft side, it would have been a very dark day,” says Mark Zandi, chief economist at Moody’s Analytics.com in West Chester, Pa.

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