US close: Stocks jump after bumper job gains, Treasuries stage advance

Markets in the US jumped on Friday, after a surprisingly strong nonfarm payrolls report saw the S&P rise past its May 2015 highs even as yields on longer-dated government debt fell.

The Dow Jones Industrial Average finished higher by 1.40% or 250.86 points at 18,146.74, while the S&P 500 added 1.53% or 32.00 to 2,129.90 - but rose past its 21 May 2015 highs on an intra-day basis - and the Nasdaq Composite advanced 1.64% or 79.95 points to see the day out from the 4,956.76 point mark.

For the holiday-shortened week the S&P clocked in with an advance of 1.3%

In parallel, the yield on the benchmark 10-year US Treasurby bond ended three basis points lower on Friday at 1.3579%.

The 287,000 headline nonfarms figure was well ahead of the forecast 170,000 increase, and reassured investors after a surprisingly small reading for May.

With the rise in payrolls came a rise in unemployment to 4.9% from 4.7%, albeit as more Americans entered the workforce in search of jobs. Wage growth was weaker than expected, increasing by 0.1% month-on-month.

The Federal Reserve has said it is using the jobs market as an indicator of when it should next raise interest rates.

Nonetheless, expectations for interest rate hikes from the Fed in the remainder of 2016 remained on ice even after the June jobs figures, due to the fallout from Brexit across the pond.

"If July payrolls show continued strength, a healthier trend reading of job growth would be consistent with reduced recession risk, in our view. For the Fed, this morning’s print will give some FOMC members confidence that underlying US labor market health has not deteriorated, as the May report had suggested.

"We maintain our view that better labor market and activity data in the coming weeks will bolster the near-term outlook for policy tightening and re-affirm our confidence that the expansion remains intact. Should the bounce back in payrolls prove transitory, risks of a looser policy path in line with current market pricing would remain," economists at Barclays Research said in a report sent to clients.

Investors were still only pricing in a 22.5% chance of another rate increase this year, according to the CME Fed Watch Tool.

Oil futures rose, with West Texas Intermediate up by 22 cents at $45.41 per barrel on NYMEX.

In corporates, Eleven Biotherapeutics shares soared after the drugmaker’s Investigational New Drug application for EBI-031 became effective, entitling the company to a $22.5m milestone payment from Hoffman-La Roche.

Gap announced late on Thursday that same-store sales rose 2% in June, leading the stock to jump early on Friday.

Juno Therapeutics tumbled after the company said on Thursday that its study into a cancer drug has been suspended by the FDA after two patients died.

Polycom was up after it was announced that Siris Capital will acquire the telecoms equipment maker for $2bn in cash, though that also brought the axe down on a previously agreed merger between Polycom and Mitel Networks.

SemiLEDS fell in early trading, after flying 208% higher on Thursday on news Peter Chiou was spending $5 per share to buy 577,000 shares in the firm.

From a sector stand-point the best performing industrial groups were: Real estate services (6.24%), Real estate investments (5.19%) and Aluminium (5.14%).

S&P 500 - Risers
CBRE Group Inc (CBG) $26.20 +6.42%
CF Industries Holdings Inc. (CF) $24.86 +5.79%
Alcoa Inc. (AA) $9.82 +5.14%
United States Steel Corp. (X) $19.03 +5.14%
Viacom Inc. Class B (VIAB) $45.20 +5.02%
Freeport-McMoRan Inc (FCX) $11.20 +4.97%
Synchrony Financial (SYF) $27.31 +4.96%
Gap Inc. (GPS) $22.70 +4.95%
Capital One Financial Corp. (COF) $64.71 +4.56%
Navient Corporation (NAVI) $12.69 +4.44%

S&P 500 - Fallers
Humana Inc. (HUM) $158.15 -2.82%
Vertex Pharmaceuticals Inc. (VRTX) $88.96 -1.21%
Starbucks Corp. (SBUX) $56.51 -0.70%
Noble Energy Inc. (NBL) $35.98 -0.42%
Under Armour Inc. Class A (UA) $40.43 -0.22%
Darden Restaurants Inc. (DRI) $62.03 -0.06%
Constellation Brands Inc. Class A (STZ) $165.99 -0.01%
Walgreen Co. (WAG) $76.05 -0.00%

Dow Jones I.A - Risers
Caterpillar Inc. (CAT) $77.37 +3.09%
E.I. du Pont de Nemours and Co. (DD) $63.69 +2.86%
American Express Co. (AXP) $61.49 +2.81%
Visa Inc. (V) $76.42 +2.56%
Home Depot Inc. (HD) $134.34 +2.42%
Intel Corp. (INTC) $34.00 +2.41%
Goldman Sachs Group Inc. (GS) $150.38 +2.30%
Boeing Co. (BA) $130.09 +2.30%
JP Morgan Chase & Co. (JPM) $61.83 +2.06%
Cisco Systems Inc. (CSCO) $29.26 +1.81%

Dow Jones I.A - Fallers

Nasdaq 100 - Risers
Viacom Inc. Class B (VIAB) $45.20 +5.02%
Nvidia Corp. (NVDA) $50.85 +4.01%
Biomarin Pharmaceutical Inc. (BMRN) $91.49 +3.78%
Liberty Global plc Series A (LBTYA) $29.27 +3.68%
Norwegian Cruise Line Holdings Ltd. - Ordinary Shares (NCLH) $42.06 +3.62%
Western Digital Corp. (WDC) $49.35 +3.55%
Citrix Systems Inc. (CTXS) $83.54 +3.53%
Nxp Semiconductors Nv (NXPI) $79.15 +3.50%
Lam Research Corp. (LRCX) $84.88 +3.46%
Micron Technology Inc. (MU) $12.62 +3.44%

Nasdaq 100 - Fallers
Baidu Inc. (BIDU) $159.80 -2.22%
Vertex Pharmaceuticals Inc. (VRTX) $88.96 -1.21%
Starbucks Corp. (SBUX) $56.51 -0.70%