Investing.com -- U.S. stocks rose sharply on Friday after robust job gains last months bolstered investor sentiment on the strength of the economy, while financial stocks remained supported by an uncertain interest rate outlook amid widespread concerns abroad.
On Friday morning, the U.S. Department of Labor's Bureau of Labor Statistics said nonfarm payrolls rose by 287,000 in June, defying expectations for gains of 180,000 and posting the highest monthly increase in eight months. While the unemployment rate inched up 0.2 to 4.9%, a broader measure of workers marginally attached to the labor market continued to tick lower, providing economists with optimism following a disappointing employment report in May. At last month's Federal Open Market Committee's (FOMC) June meeting, the Fed singled out a weakening labor market for prompting participants to lower the trajectory of their long-term rate path.
The Dow Jones Industrial Average soared 250.86 or 1.40% to 18,146.74, erasing all of its post-Brexit losses from late-June when the index plunged approximately 850 points over the span of two sessions. The NASDAQ Composite index also added 79.95 or 1.64% to 4,956.76, while the S&P 500 Composite index gained 32.00 or 1.53% to 2,129.90, moving fractions from its all-time record closing high of 2,130.82. On the S&P 500, all 10 sectors closed in the green as stocks in the Basic Materials, Industrials and Financials industries led.
The SPDR XLF Financial Sector ETF surged more than 1.9% to 22.92, as JPMorgan Chase & Co (NYSE:JPM) and Wells Fargo & Company (NYSE:WFC) both rose sharply for the session. While Goldman Sachs Group Inc (NYSE:GS) said on Friday there is a 66% chance the Fed could raise interest rates this year, Fed futures rates from the CME Group (NASDAQ:CME) were still drastically lower following the report. Any rate hikes by the Fed this year are viewed as bearish for financial stocks, as higher rates depress a bank's net interest margin. It sets the stage for the start of a critical earnings period next week when a host of prominent Wall Street banks are scheduled to report results for the second quarter.
The top performer on the Dow was CAT, which added 2.37 or 3.16% to 77.42. Caterpillar (NYSE:CAT) finished just above EI du Pont de Nemours and Company (NYSE:DD), which gained 1.86 or 3.00% to 63.78. Earlier on Friday, a Federal jury in Columbus, Ohio awarded limited punitive damages of $500,000 to a man who developed testicular cancer from drinking water contaminated by the company's Teflon chemicals. The verdict came one day after attorneys for the plaintiff argued that DuPont (NYSE:DD) should pay an additional $1.2 billion in fines for dumping Teflon from a West Virginia plant into nearby waters. On Wednesday, the same jury awarded the plaintiff $5.1 million for negligence. Johnson & Johnson (NYSE:JNJ) finished as the worst performer on the Dow, gaining 0.30 or 0.24% to 122.81.
The biggest gainer on the NASDAQ was Viacom B Inc (NASDAQ:VIAB), which jumped 2.20 or 5.11% to 45.24. Viacom shares popped after Reuters reported that Mario Gabelli, the company's second-largest shareholder, believes it could be increasingly more difficult for CEO Phillipe Dauman to retain his position. Dauman is embroiled in a prolonged battle with majority owner Sumner Redstone for control of the media giant. The worst performer was Baidu Inc (NASDAQ:BIDU), which fell 3.89 or 2.38% to 159.53. In total, only three companies on the NASDAQ 100 closed lower in Friday's session.
On the New York Stock Exchange, advancing issues outnumbered declining ones by a 2,679-347 margin.