U.S. stocks are jumping Friday morning as a strong July jobs report gave investors more confidence that the economy is still growing. The Labor Department said employers added 255,000 jobs, far more than experts expected. Bank stocks rose on the prospect of higher interest rates and consumer companies rose as investors hope consumers will have more money to spend.
KEEPING SCORE: The Dow Jones industrial average surged 160 points, or 0.9 percent, to 18,511 as of 11:42 a.m. Eastern time. The Standard & Poor’s 500 index rose 17 points, or 0.8 percent, to 2,181. The Nasdaq composite gained 57 points, or 1.1 percent, to 5,223. The Dow and the S&P 500 are now higher for the week, while the Nasdaq extended its gains.
Investors sold traditionally safe stocks like utilities and phone companies and the prices of gold and silver fell.
JOBS RELIEF: The strong jobs report follows an even larger gain in June. It suggests that Britain’s vote to leave the European Union in late June didn’t have much effect on hiring plans. The brisk pace of hiring represents a turnaround from weak job growth in the first half of this year, including disappointing job gains in April and May. The Labor Department said the unemployment rate remained at 4.9 percent and hourly pay continued to rise. It’s up 2.6 percent over the last 12 months, matching the fastest pace since the recession.
EYES ON THE FED: The Federal Reserve has been saying for months that it intends to raise interest rates if the economy’s strength warrants it. July’s report provides more evidence the economy is doing well, boosting the chances of a rate. Banks rose the most Friday morning, as higher interest rates boost their profits on lending. Bank of America rose 55 cents, or 3.8 percent, to $15.03 and Citigroup added $1.40, or 3.2 percent, to $45.25.
CONSUMER COMPANIES CLIMB: Priceline posted a bigger profit than expected and its stock rose $67.36, or 5 percent, to $1,427.35. That was the biggest gain among consumer companies, but Priceline was far from alone. Home Depot also added $1.37, or 1 percent, to $137.42 and Nike gained 98 cents, or 1.8 percent, to $55.78.
FUNKY CHICKEN: Tex-Mex food chain El Pollo Loco jumped 97 cents, or 7.4 percent, to $14.05 after its results were stronger than analysts expected.
A TASTE FOR KRAFT: Kraft Heinz, also traded higher after it reported a larger profit than analysts expected. Its stock picked up $4.19, or 4.9 percent, to $89.73.
BONDS: Bond prices fell and the yield on the 10-year U.S. Treasury note rose to 1.56 percent from 1.50 percent.
SECURITY: Security software maker FireEye tumbled after it reported weak sales, cut its estimates for billings and revenue, and said it will eliminate 300 to 400 jobs to reduce costs. Its stock plunged $2.09, or 12.5 percent, to $14.66. Security software rival Symantec disclosed a larger profit and better sales than expected in its fiscal first quarter, and its full-year profit forecast was stronger than expected. Its stock climbed $1.15, or 5.5 percent, to $22.18.
LUNG CANCER TREATMENTS: Bristol-Myers Squibb stock sank $12.80, or 17 percent, to $62.52 after the company said its drug Opdivo did not halt progression of non-small cell lung cancer in a clinical study. Opdivo is used to treat several types of cancer and Bristol-Myers brought in $1.5 billion in revenue from the drug in the first half of this year, but is running more studies in the hope of winning new marketing approvals.
The failure boosted companies that are making similar drugs that also use patients’ immune systems to fight lung cancer. Merck, which took in $533 million from its drug Keytruda this year, rose $4, or 6.9 percent, to $61.84. AstraZeneca, which is also studying a lung cancer drug regimen, added 37 cents, or 1.1 percent, to $34.67.
ENERGY: Benchmark U.S. crude slid 61 cents, or 1.5 percent, to $41.32 per barrel in New York while Brent crude, used to price international oils, lost 61 cents, or 1.4 percent, to $43.68 a barrel in London.
METALS: Gold skidded $22.80, or 1.7 percent, to $1,344.60 an ounce. Silver fell 65 cents, or 3.2 percent, to $19.79 an ounce. Copper dipped 1 cent to $2.16 a pound.
CURRENCIES: The dollar rose to 101.83 yen from 101.17 yen and the euro fell to $1.1078 from $1.1127.
OVERSEAS: France’s CAC-40 rose 1.5 percent and the DAX in Germany advanced 1.3 percent. London’s FTSE 100 was 0.8 percent higher. The Shanghai Composite Index shed 0.2 percent and Tokyo’s Nikkei 225 was little changed. In South Korea, the Kospi rose 0.9 percent.