US stocks have racked up solid gains after a good US jobs report for June.
At the closing bell on Friday, the Dow Jones Industrial Average jumped 147.29 (0.98 per cent) to 15,135.84.
The broad-based S&P 500 rose 16.48 (1.02 per cent) to 1631.89, while the tech-rich Nasdaq Composite Index added 35.71 (1.04 per cent) to 3479.38.
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 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 per cent), Morgan Stanley (up 2.3 per cent), Wells Fargo (up 2.0 per cent), American Express (up 2.4 per cent) and Visa (up 2.0 per cent).
Metals stocks, including Newmont Mining Corp. (down 4.3 per cent) and Yamana Gold (down 4.6 per cent) fell as gold and copper prices retreated.
Dell shares lost 2.1 per cent 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 spectre of higher interest rates, which could hit home buying. Lennar Corp dropped 4.0 per cent, PulteGroup fell 2.9 per cent and DR Horton gave up 3.2 per cent.
Oil and gas firm Apache gained 2.4 per cent 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 per cent compared with 2.50 per cent on Wednesday, before the US Independence Day holiday. The yield on the 30-year bond shot up to 3.68 per cent from 3.50 per cent.
