After turning in a lackluster performance in the previous session, stocks showed a substantial upward move during trading on Friday, as traders reacted positively to a much better than expected report on the employment situation in the month of January.
The major averages moved roughly sideways in afternoon trading, closing firmly in positive territory. The Dow jumped 156.82 points or 1.2 percent to 12,862.23, the Nasdaq soared 45.98 points or 1.6 percent to 2,905.66 and the S&P 500 surged up 19.36 points or 1.5 percent to 1,344.90.
For the week, the Dow rose by 1.6 percent, the Nasdaq shot up by 3.2 percent and the S&P 500 advanced by 2.2 percent. With the gains, the Dow ended the session at its best closing level in over three years, while the Nasdaq reached an eleven-year closing high.
The rally on Wall Street came following the release of a report from the Labor Department showing that stronger than expected job growth in the month of January drove the unemployment rate down to its lowest level in almost three years.
The Labor Department said non-farm payroll employment jumped by 243,000 jobs in January following a revised increase of 203,000 jobs in December. Economists had expected employment to increase by about 140,000 jobs.
With the stronger than expected job growth, the unemployment rate unexpectedly fell to 8.3 percent from 8.5 percent in the previous month. The drop pulled the unemployment rate down to its lowest level since a matching number in February of 2009.
Adding to the positive sentiment, the Institute for Supply Management released a report showing that its index of activity in the service sector jumped to an eleven-month high in January.
The ISM said its non-manufacturing index rose to 56.8 in January from a revised 53.0 in December, with a reading above 50 indicating growth in the service sector. Economists had expected the index to edge up to 53.3 from the 52.6 originally reported for the previous month.
With the bigger than expected increase, the index rose to its highest level since coming in at a reading of 59.0 in February of 2011.
Among individual stocks, shares of Tyson Foods (TSN) surged up by 4.1 percent after the meat processor reported better than expected first quarter earnings and said it expects its beef segment to be profitable in 2012.
Weyerhaeuser (WY) also turned in a strong performance after the lumber and real estate company reported much better than expected fourth quarter earnings.
In overseas trading, stocks markets across the Asia-Pacific region turned in a mixed performance on Friday. While Japan's Nikkei 225 Index fell by 0.5 percent, Hong Kong's Hang Seng Index edged up by 0.1 percent.
Meanwhile, the major European markets all saw considerable strength on the day. The French CAC 40 Index jumped by 1.5 percent, while the German DAX Index and the U.K.'s FTSE 100 Index shot up by 1.7 percent and 1.8 percent, respectively.
In the bond market, treasuries showed a notable move to the downside on the heels of the upbeat jobs data. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, jumped 12.4 basis points to 1.949 percent.
With optimism about the outlook for the economy generating broad based buying interest, most of the major sectors showed strong moves to the upside on the day.
Networking stocks posted particularly strong gains, driving the NYSE Arca Networking Index up by 4.7 percent to a six-month closing high. Infinera (INFN) helped to lead the sector higher, jumping by 14.6 percent after reporting better than expected fourth quarter results.
Significant strength was also visible among housing stocks, as reflected by the 4.6 percent gain posted by the Philadelphia Housing Sector Index. Standout gains by M.D.C. Holdings and KB Home (KBH) helped to lift the index to its best closing level in well over a year.
Banking stocks also saw considerable strength, resulting in a 3.3 percent gain by the KBW Bank Index. Comerica (CMA) and Bank of America (BAC) turned in two of the sector's best performances.
Airline, electronic storage, healthcare provider, and steel stocks also posted notable gains, while gold and health insurance stocks were among the few groups that bucked the uptrend by the broader markets.
Following the slew of economic data that was released this week, the economic calendar for next is week is relatively light.
Nonetheless, traders are likely to keep an on the release of U.S. reports on weekly jobless claims, consumer sentiment, and the trade deficit. Trading could also be impacted by the outcome of monetary policy meetings in Europe and the U.K.
On the earnings front, Disney (DIS), Coca-Cola (KO), Sprint Nextel (S), Visa (V), and Cisco Systems (CSCO) are among the companies due to release their quarterly results next week.
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Business News
June 05, 2026 16:18 ET A busy week for economic news flow saw a slew of reports being released that reflected the trends in the U.S. labor market. In Europe, economic growth and inflation data gained attention as the European Central Bank and Bank of England head for policy session later in the month. In Asia, the monetary policy session of the Indian central bank was in focus as the country, a major oil importer, reels under the pressures of a weaker rupee and rising inflation.