US open: Stellar nonfarms lead markets higher

Markets in the US opened higher on Friday, after a surprisingly strong nonfarm payrolls reading before the opening bell.

After the bell, the Dow Jones Industrial Average was up 0.7%, the S&P 500 added 0.73% and the Nasdaq Composite rose 0.72%.

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%, however, as more Americans entered the workforce in search of jobs.

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

There was concern after May’s disappointing result, and the fallout of Brexit across the pond, that the Fed’s planned rate increases were being put on hold.

Investors are no longer pricing in a rate increase this year, according to the CME Fed Watch Tool, having previously anticipated several rate hikes over the course of 2016.

Oil was still rising, with West Texas Intermediate up 1.01% at $45.60 per barrel and Brent crude adding 0.94% at $46.84.

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.

On the economic front, consumer credit data for May is due at 2000 BST, with a reading on North America’s oil rig count also due from Baker Hughes during the session, which could have an impact on crude prices.