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US stocks surge on jobs report

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(Globalpost/GlobalPost)

US stocks racked up solid gains Friday after a good US jobs report for June.

At the closing bell, the Dow Jones Industrial Average jumped 147.29 (0.98 percent) to 15,135.84.

The broad-based S&P 500 rose 16.48 (1.02 percent) to 1,631.89, while the tech-rich Nasdaq Composite Index added 35.71 (1.04 percent) to 3,479.38.

The gains came after the Labor Department reported the US economy added 195,000 jobs in June, well above the consensus estimate of 166,000 jobs.

The report reinforced expectations that the Federal Reserve would soon begin tapering its bond-buying program, and sent US Treasury yields sharply higher.

But, after a mid-morning dip, stocks pulled back and stayed higher through to the close..

"What we're seeing here is the stock market separating itself from the risk associated with the bond market and with other investments around the world," said Bud Kasper, a partner in the Barber Financial Group.

Banks and other financial equities gained on the greater confidence in the US economy.

These included JPMorgan Chase (up 2.3 percent), Morgan Stanley (up 2.3 percent), Wells Fargo (up 2.0 percent), American Express (up 2.4 percent) and Visa (up 2.0 percent).

Metals stocks, including Newmont Mining Corp. (down 4.3 percent) and Yamana Gold (down 4.6 percent) fell as gold and copper prices retreated.

Dell shares lost 2.1 percent after a statement from a special board committee warned investors against rejecting the Michael Dell-led plan to take the company private. Corporate raider Carl Icahn has been pressing Michael Dell to raise his bid.

Homebuilder stocks faltered as rising bond yields raised the specter of higher interest rates, which could hit home buying. Lennar Corp. dropped 4.0 percent, PulteGroup fell 2.9 percent and DR Horton gave up 3.2 percent.

Oil and gas firm Apache gained 2.4 percent amid greater confidence that the company's considerable Egyptian operations would not be significantly affected by the political turmoil in the country.

Guggenheim Securities recommended a "buy" on Apache based on its growth opportunities in the US and the limited chance its Egyptian operations would be completely shut down, according to Barrons.com.

The 10-year Treasury rose to 2.71 percent compared with 2.50 percent Wednesday, before the US Independence Day holiday. The yield on the 30-year bond shot up to 3.68 percent from 3.50 percent.

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http://www.globalpost.com/dispatch/news/afp/130705/us-stocks-surge-jobs-report-0