(Updated at 4:15 PM EDT)
Stocks jumped Friday, sending the S&P 500 index toward the highest level since May, after data showed payrolls climbed more than forecast in July even as the jobless rate unexpectedly rose to a five-month high.
The Dow Jones industrial average closed up 217.29, or 1.69%, at 13096.17; the S&P 500 rose 25.99, or 1.90%, closing at 1390.99; and the Nasdaq composite was up 58.13, or 2.00%, to close at 2967.90. All numbers are preliminary.
The S&P 500’s rise follows a 1.5% decline over four days.
Equities gained as payrolls increased 163,000 following a revised 64,000 rise in June that was less than initially reported. Economists projected a gain of 100,000. Unemployment rose to 8.3%. The Institute for Supply Management’s index of U.S. non-manufacturing businesses, which covers about 90% of the economy, rose to 52.6 in July, beating estimates.
Stocks fell over the last four days as European Central Bank President Mario Draghi and Federal Reserve Chairman Ben S. Bernanke failed to reassure investors on immediate efforts to bolster the economy. Members of German Chancellor Angela Merkel’s coalition parties signaled they won’t stand in the way of the ECB’s plan to buy government bonds.
Investors also monitored the latest developments with Knight Capital. The shares rallied 58% to $4.09 in late trading following a report the firm advised some clients it obtained a line of credit, easing concern the market maker will collapse following a $440 million loss from a software bug. Knight spokeswoman Kara Fitzsimmons didn’t immediately respond to requests for comment.
The company opened its books to potential buyers, including private equity firms and at least one securities industry rival, as it seeks an investment or takeover to survive, said two people with knowledge of the matter.
Knight is working with Goldman Sachs Group and Sandler O’Neill & Partners as advisers in the rescue talks, said one of the people, who spoke on condition of anonymity because the discussions are private. The company is under pressure to strike a deal within days, the people said.