U.S. stocks surge after solid job creation report
US stocks surged Friday after a better-than-expected labor report showed solid job creation in November and boosted prospects that the Federal Reserve will begin to taper stimulus.
After 45 minutes of trade, the Dow Jones Industrial Average surged 130.39 points (0.82 percent) to 15,951.90.
The broad-based S&P 500 advanced 15.03 (0.84 percent) to 1,800.06, while the tech-rich Nasdaq Composite Index jumped 20.22 (0.50 percent) to 4,053.38.
The strong opening rally signaled stocks looked ready to break a string of losses after a better-than-expected November jobs report showed the US jobless rate fell sharply, to 7 percent, a five-year low, and the economy added 203,000 jobs.
Wall Street’s bullish reaction to the increased odds that the Fed will begin reducing its monthly $85 billion in asset purchases aimed at holding down long-term interest rates seems counterintuitive, said Chris Low of FTN Financial.
“This could be what technicians call a nail, where markets reject news and move counterintuitively, typically after correctly anticipating something. If so, it often means a change in momentum. After five straight days of selling, the markets may be ready to rally,” Low said.
In corporate news, retailer Sears powered up 2.2 percent after announcing plans to spin off its Lands’ End clothing business, subject to shareholder approval.
Ulta Salon, Cosmetics & Fragrance plunged 20.3 percent after a disappointing fiscal third-quarter earnings report showed a decline in same-store sales.
Dow member Intel gained 2.7 percent, leading the 30-stock index higher.
Bond prices were mixed. The yield on the 10-year US Treasury was unchanged at 2.86 percent from Thursday, while the 30-year dipped to 3.90 percent from 3.91 percent. Bond prices and yields move inversely.