U.S. stocks rose Friday, giving the Standard & Poor's 500 index its best two-day rally since January, after better-than-forecast growth in employment indicated the economy continues to expand.
The Dow Jones industrial average closed up 207.50, or 1.38%, at 15,248.12; the S&P 500 rose 20.82, or 1.28%, closing at 1,643.38; and the Nasdaq composite was up 45.16, or 1.32%, to close at 3,469.21. All numbers are preliminary.
The S&P 500 rallied 2.1% in the past two days to finish the week 0.8% higher.
“This report's in the sweet spot,” Brian Jacobsen, who helps oversee $221.2 billion as chief portfolio strategist at Wells Fargo Advantage Funds, said by telephone. “It shows investors that the economy is growing but not fast enough for them to be concerned that the Fed is going to start tapering its asset purchase program.”
Federal Reserve stimulus and better-than-expected earnings have propelled the bull market in U.S. equities into a fifth year and driven the S&P 500 up 143% from a 12-year low in 2009. The index has dropped 1.6% since closing at a record high on May 21, the day before Fed Chairman Ben S. Bernanke suggested the central bank could curtail its $85 billion monthly bond purchases if the job market improved in a “real and sustainable way.”
Equity futures surged after a Labor Department report showed payrolls rose 175,000 last month after a revised 149,000 increase in April that was smaller than first estimated. The jobless rate climbed from a four-year low as more Americans entered the labor force. Data Thursday showed jobless claims decreased by 11,000 to 346,000.
“The jobs report provided a sense of relief for a lot of investors,” Robert Doll, chief equity strategist at Nuveen Asset Management, said in a phone interview. His firm manages about $250 billion in assets. “Many people had feared it was going to be worse than the estimates, but we remain stuck in the middle. It's not so weak that you say 'Oh my goodness, the economy,' and it's not so strong that you expect the Fed is going to start scaling back bond buying in September.”