NEW YORK: Steady growth in hiring last month sent the stock market sharply higher Friday.
U.S. employers added 175,000 jobs in May, slightly more than the 170,000 forecast by economists, according to data provider FactSet. More people also began looking for work, another encouraging sign.
The report gave a boost to stock market bulls, who expect the Fed to keep up its stimulus program as the U.S. economy continues to recover moderately. That combination pushed the Dow Jones industrial average and the Standard & Poor’s 500 index to record highs last month.
Federal Reserve policy makers are now all but certain to refrain from easing back on their stimulus program at the next two-day policy meeting, which starts June 18, said Phil Orlando, chief equity strategist at Federated Investors.
“This was, in our view, very much a ‘Goldilocks’ number,” said Orlando. “There is zero chance that the Federal Reserve is going to start tapering monetary policy.”
The central bank is buying $85 billion of bond every month to keep interest rates low and encourage borrowing and spending. Low interest rates also keep bond prices high and push up demand for riskier assets like stocks.
The Dow Jones Industrial average had its best day in five months. It rose 207 points, or 1.4 percent, to close at 15,248.12. That gain was surpassed this year only by its 2.4 percent rise Jan. 2.
Boeing led the index higher with a gain of $2.73, or 2.7 percent, to $102.49. Industrial conglomerate 3M gained $2.44, or 2.2 percent, to $111.11. Twenty-six of the 30 stocks in the Dow rose.
The Standard & Poor’s 500 index rose 20.82 points, or 1.3 percent, to 1,643.38. The Nasdaq composite rose 45.16 points, or 1.3 percent, to 3,469.22.
Nine of the 10 industry groups in the S&P 500 index rose, led by consumer discretionary stocks, which stand to benefit more than other sectors if the economy picks up. Industrial companies and banks also posted strong gains.
The only S&P 500 industry group that fell was telecommunications.
The price of gold fell $32.80, or 2.3 percent, to $1,383 an ounce. Gold has fallen sharply this year as a rising stock market and a strengthening dollar have diminished its appeal as an alternative investment. Oil rose $1.27, or 1.3 percent, to $96.03 a barrel.
Gap rose $1.11, or 2.7 percent, to $42.09. The San Francisco-based clothing store chain reported late Thursday that its sales jumped 7 percent in May, more than expected, helped by strong results at its namesake Gap and Old Navy stores.
TiVo plunged $2.61, or 19 percent, to $11.10 after the company settled patent disputes with several technology companies including Cisco.