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U.S. Stocks See Further Upside After Early Rally

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After moving sharply higher early in the session, stocks have seen some further upside over the course of the trading day on Friday. With the advance, the major averages are climbing back toward last week's record highs.

Currently, the major averages are just off their highs of the session. The Dow is up 330.17 points or 1.2 percent at 28,007.96, the Nasdaq is up 82.34 points or 1 percent at 8,653.04 and the S&P 500 is up 31.43 points or 1 percent at 3,148.86.

The rally on Wall Street comes after the Labor Department's closely watched monthly employment report showed much stronger than expected U.S. job growth in the month of November.

The report said non-farm payroll employment surged up by 266,000 jobs in November after climbing by an upwardly revised 156,000 jobs in October.

Economists had expected an increase of about 180,000 jobs compared to the addition of 128,000 jobs originally reported for the previous month.

The Labor Department said notable job gains occurred in healthcare and in professional and technical services, while manufacturing employment also rose as General Motors (GM) workers returned from a strike.

With the stronger than expected job growth, the unemployment rate edged down to 3.5 percent in November from 3.6 percent in October. The unemployment rate was expected to remain unchanged.

Adding to the positive sentiment, preliminary data released by the University of Michigan showed a much bigger than expected improvement in U.S. consumer sentiment in the month of December.

The report said the consumer sentiment index climbed to 99.2 in December from the final November reading of 96.8. Economists had expected the index to inch up to 97.0.

With the much bigger than expected increase, the consumer sentiment index reached its highest level since hitting 100.0 in May.

Surveys of Consumers chief economist Richard Curtin said nearly all of the improvement in consumer sentiment in December was among upper income households, who reported near record gains in household wealth due to record high stock prices.

Sector News

Energy stocks continue to turn in some of the market's best performances in mid-day trading, benefiting from a notable increase by the price of crude oil.

Crude for January delivery is climbing $0.70 to $59.13 a barrel after OPEC and its allies confirmed plans to deepen oil production cuts to 1.7 million barrels a day.

Reflecting the strength in the energy sector, the Philadelphia Oil Service Index has spiked by 3.8 percent, the NYSE Arca Natural Gas Index is up by 2.5 percent and the NYSE Arca Oil Index is up by 2.1 percent.

Significant strength also remains visible among steel stocks, as reflected by the 2 percent jump by the NYSE Arca Steel Index. The index has reached its best intraday level in over four months.

Banking, computer hardware, and semiconductor stocks are also seeing considerable strength, while gold stocks are among the few groups bucking the uptrend amid a steep drop by the price of the precious metal.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Friday. Japan's Nikkei 225 Index edged up by 0.2 percent, while Hong Kong's Hang Seng Index jumped by 1.1 percent.

The major European markets also showed strong moves to the upside on the day. While the German DAX Index advanced by 0.9 percent, the French CAC 40 Index and the U.K.'s FTSE 100 Index surged up by 1.2 percent and 1.4 percent, respectively.

In the bond market, treasuries are extending the pullback seen over the two previous sessions. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is up by 4.5 basis points at 1.842 percent.

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