Stocks jumped Friday on news of steady growth in hiring last month.?Expectation of continued economic stimulus from the Federal Reserve also pushed stocks upward.?
Traders work on the floor at the New York Stock Exchange, Friday. Stocks rose strongly in the morning Friday, then eased slightly in the early afternoon. The gains accelerated in the final hour of trading.
Brendan McDermid/Reuters
EnlargeSteady growth in hiring last month sent the?stock?market sharply higher Friday.
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U.S. employers added 175,000 jobs in May, slightly more than the 170,000 forecast by economists, according to data provider FactSet. More Americans also began looking for work, another encouraging sign.
The report gave a boost to?stock?market bulls, who expect the Fed to keep up its stimulus program as the U.S. economy continues to recover moderately. That combination pushed the Dow Jones industrial average and the Standard & Poor's 500 index to record highs last month.
The Dow Jones Industrial average had its best day in five months. It rose 207 points, or 1.4 percent, to close at 15,248.12. That gain was surpassed this year only by its 2.4 percent rise Jan. 2.
The Standard & Poor's 500 index rose 20.82 points, or 1.3 percent, to 1,643.38. The Nasdaq composite rose 45.16 points, or 1.3 percent, to 3,469.22.
Federal Reserve policy makers are now all but certain to refrain from easing back on their stimulus program at the next two-day policy meeting, which starts June 18, said Phil Orlando, chief equity strategist at Federated Investors.
"This was, in our view, very much a 'Goldilocks' number," said Orlando. "There is zero chance that the Federal Reserve is going to start tapering monetary policy."
The central bank is buying $85 billion of bond every month to keep interest rates low and encourage borrowing and spending. Low interest rates also keep bond prices high and push up demand for riskier assets like?stocks.
Stocks?rose strongly in the morning, then eased slightly in the early afternoon. The gains accelerated in the final hour of trading.
Boeing led the index higher with a gain of $2.73, or 2.7 percent, to $102.49. Industrial conglomerate 3M gained $2.44, or 2.2 percent, to $111.11. Twenty-six of the 30?stocks?in the Dow rose.
Nine of the 10 industry groups in the S&P 500 index rose, led by consumer discretionarystocks, which stand to benefit more than other sectors if the economy picks up. Industrial companies and banks also posted strong gains.
The only S&P 500 industry group that fell was telecommunications, a so-called defensive sector that investors favor when they are seeking safety and high dividends.
Stocks?slumped on Tuesday and Wednesday after disappointing reports on private-sector hiring and manufacturing. The S&P 500 index lost 1.9 percent over those two days. Friday's gain erased the S&P's loss for the week. The S&P gained 0.8 percent since last Friday.
Financial markets have turned volatile over the past two weeks as traders parse comments from Fed officials for hints about when the central bank will cut back on its support. When it happens, the wind-down will help nudge interest rates higher.
For investors who expect the Fed to stay the course, "these types of slow economic growth reports speak to that," said Kevin Mahn, chief investment officer at Hennion & Walsh Asset Management. "It keeps interest rates at record lows and it keeps the equity markets humming."
Source: http://rss.csmonitor.com/~r/feeds/csm/~3/9j8psxxIMPE/Stocks-rise-on-hiring-jump
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