U.S. Stocks Move Sharply Higher On Slightly Stronger Than Expected Jobs Data

Stocks have shown a strong move to the upside during trading on Friday, regaining ground after ending yesterday’s volatile session mostly lower. With the upward move, the S&P 500 has reached its best intraday level in well over three months.

Currently, the major averages are off their best levels of the day but still sharply higher. The Nasdaq is up 240.22 points or 1.2 percent at 19,538.67, the S&P 500 is up 65.36 points or 1.1 percent at 6,004.66 and the Dow is up 488.29 points or 1.2 percent at 42,808.03.

The rally on Wall Street comes following the release of a closely watched Labor Department report showing slightly stronger than expected U.S. job growth in the month of May.

The Labor Department said non-farm payroll employment shot up by 139,000 jobs in May after jumping by a downwardly revised 147,000 jobs in April.

Economists had expected employment to increase by about 130,000 jobs compared to the addition of 177,000 jobs originally reported for the previous month.

Meanwhile, the report said the unemployment rate came in at 4.2 percent in May, unchanged from the previous month and in line with economist estimates.

The modestly bigger than expected increase in employment has helped offset concerns about the strength of the economy following some recent downbeat data.

“The slowdown in the job market has been quite smooth so far without many surprises,” said Jeffrey Roach, Chief Economist for LPL Financial. “If payroll growth trudges on like this, the Fed will likely remain in “wait and see” mode. Markets breathed a sigh of relief after this morning’s payroll release.”

Sector News

Energy stocks have moved sharply higher along with the price of crude oil, with the Philadelphia Oil Service Index and the NYSE Arca Oil Index jumping by 2.4 percent and 1.8 percent, respectively.

Considerable strength is also visible among computer hardware stocks, as reflected by the 1.6 percent gain being posted by the NYSE Arca Computer Hardware Index.

Banking, airline and biotechnology stocks are also seeing significant strength, while gold stocks are under pressure amid a notable decrease by the price of the precious metal.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region turned in another mixed performance during trading on Friday. Japan’s Nikkei 225 Index rose by 0.5 percent, while Hong Kong’s Hang Seng Index fell by 0.5 percent.

The major European markets are also mixed on the day. While the German DAX Index is down by 0.2 percent, the French CAC 40 Index is up by 0.1 percent and the U.K.’s FTSE 100 Index is up by 0.2 percent.

In the bond market, treasuries have come under pressure in reaction to the better than expected U.S. jobs data. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is up by 6.9 basis points at 4.464 percent.

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