NEW YORK: Stocks rose Friday, sending the Standard & Poor’s 500 index to the biggest rally in three weeks, after government data showed the nation added more jobs than forecast last month.
Lincoln National Corp. climbed 5.4 percent, leading a rally among life insurers as bond yields surged on bets the Federal Reserve will begin to reduce its asset buying. KeyCorp, a regional bank based in Cleveland with Akron operations, advanced as Wells Fargo & Co. said regional banks benefit more than larger rivals from new rules on capital.
Meanwhile, Tesla Motors Inc. added 4.2 percent after saying it received enough orders to double the number of electric cars in Hong Kong. Homebuilders slumped amid concern that rising interest rates may curtail a housing recovery.
The S&P 500 gained 1 percent, the most since June 13, to 1,631.89. The index advanced 1.6 percent for the week. The Dow Jones industrial average added 147.29 points, or 1 percent, to 15,135.84.
“The jobs report is pretty strong. It’s a good number for equities because it’s supportive for earnings growth, which is what we need,” said Matthew Peron, head of active equities at Northern Trust Corp. in Chicago. His firm manages about $810 billion. “We have to digest the backup in yields, we have to see how far do they go and get used to that level of rates.”
Payrolls rose by 195,000 workers for a second straight month, the Labor Department reported.
Economic growth amid monetary stimulus from the Federal Reserve has helped send the S&P 500 up 141 percent from its bear-market low in 2009, including a 14 percent rally so far this year. The index has slipped 2.2 percent from its last record on May 21 after Fed Chairman Ben S. Bernanke said the central bank could begin to reduce bond purchases should the employment market show sustainable growth.
Alcoa Inc. will unofficially start the second-quarter earnings season as the biggest U.S. aluminum producer will report results after the market closes on Monday.
Profits for S&P 500 stocks probably grew 1.8 percent, according to analyst estimates compiled by Bloomberg. That’s down from a projected increase of 6.2 percent at the beginning of the quarter. Earnings are forecast to jump 5.5 percent for the third quarter and 11 percent for the final three months of this year, the data show.
Nine of 10 S&P 500 main industries gained as financial, industrial and health-care companies rose more than 1.3 percent. JPMorgan Chase & Co. added 2.3 percent to $53.99 and Bank of America Corp. advanced 1.8 percent to $13.06.
Lincoln, the life insurer with more than $200 billion in assets, climbed 5.4 percent to $38.98. Higher interest rates can boost profits for life insurers, which invest premiums from clients. MetLife Inc., the largest U.S. life insurer, gained 2.7 percent to $47.52.
Regional lenders rose as KeyCorp, Ohio’s second-largest bank, jumped 5 percent to $12. Smaller banks face less onerous risk weightings for residential mortgages under the Basel Committee on Banking Supervision’s latest set of global standards, Wells Fargo analyst Matthew Burnell wrote in a note.