US stocks surged on Friday, with the S&P 500 touching a record intraday high after a second straight month of robust labor market data brightened the economic outlook. The US Labour Department report showed that nonfarm payrolls rose by 255,000 in July, far exceeding estimates of 180,000. While unemployment rate remained unchanged at 4.9 percent, it stayed below the 5 percent mark associated with full employment. Average hourly wages rose by 8 cents.
The S&P 500 touched 2,180.78, its ninth record intraday high since July. "(The data) cements the view that the economy is improving despite the recent negative news from GDP," said Aaron Kohli, an interest rate strategist at BMO Capital Markets in New York. The data also suggests that the April and May jobs numbers were an aberration and that June was more consistent with what is going on in the economy, he said. The June employment number was revised to 292,000 from 287,000.
"I'm not sure this (jobs data) is enough to move the needle in either direction for the Fed," said Curt Long, chief economist at National Association Of Federal Credit Unions in Washington. At 12:18 pm ET (1618 GMT), the Dow Jones Industrial Average was up 166.11 points, or 0.91 percent, at 18,518.16. The S&P 500 index was up 17.87 points, or 0.83 percent, at 2,182.12.
The Nasdaq Composite was up 58.08 points, or 1.12 percent, at 5,224.33. The index surpassed its record closing high and is on track to mark its sixth straight week of gains. Eight of the 10 major S&P 500 sectors were higher, led by a 1.69 percent surge in the financials index. The sector was trading at its highest level since the start of the year.
The CBOE volatility index, also known as Wall Street's "fear gauge", was trading at a 12-month low of 11.26, indicating that risk appetite had improved. Banks, which stand to gain if the Fed raises rates, were among the biggest drivers of the S&P. J.P. Morgan, Bank of America and Citigroup rose about 3 percent.