U.S. stock prices rallied on Friday bolstered by stronger-than-expected jobs report that suggested the economy is on a solid footing.
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The jobs report was not only robust, it was also what markets craved--strong headline numbers along with a dose of wage-growth stagnation. Such recipe means economic growth will continue but lack of inflation will keep the Fed from rushing to raise interest rates.
The gains on Friday were helping dent weekly losses, but the main benchmarks were still on track to finish the week lower.
The S&P 500 (SPX) rose 20 points, or 1%, to 1,966.10, with health care and consumer discretionary stocks leading the gains. The Dow Jones Industrial Average (DJI) gained 173 points, or 1%, to 16,974.28. The Nasdaq Composite (RIXF) added 50 points, or 1.1%, to 4,479.54.
Mike Arone, chief investment strategist at State Street Global Advisors' U.S. Intermediary Business, stressed that not only the headline number of the jobs report was good, but underlying components showed strength, referring to substantial upward revisions for July and August.
"The fact that the wage growth remains tame and inflation below target, bodes well for the markets as the Fed won't be pressured to raise rates sooner. It appears that markets are finally in a cycle where good news is good news," Arone said.
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Data:The U.S. economy added 248,000 jobs in September and hiring in August turned out to be a lot stronger than forecasts, showing the U.S. economy entered the fall with rising momentum. The unemployment rate fell to 5.9%, falling below 6% mark for the first time since 2008.
The U.S. trade deficit fell 0.5% to $40.1 billion in August, marking the lowest level since January as the nation exported a record amount of petroleum and imported less.
U.S. services and other nonmanufacturing companies reported slower growth for September, after hitting its highest level since 2008 in August, according to a survey of senior executives released Friday.
Movers: Mylan Inc. (MYL) shares rallied 7.9% after the pharmaceutical company raised its third-quarter and full-year earnings guidance.
Tekmira Pharmaceuticals Corp. (TKMR) shares jumped 9.7%, as the widening breadth of Ebola cases in the U.S. gave brighten the company's business outlook. Tekmira is one of a handful of biotech companies working on treatments for the Ebola virus.
In commodities-related shares, plunging gold prices put pressure on miners, while energy groups suffered from falling oil prices. Oil and mining stocks were among the worst performers on the S&P 500 on Friday. Diamond Offshore Drilling (DO) fell 4.4%, Newmont Mining Corporation (NEM) was down 2.9%.
(Read more about the day's notable stocks in Movers & Shakers column http://www.marketwatch.com/story/gm-jp-morgan-krispy-kreme-in-focus-2014-10-03.).
Other markets: Asian markets closed mostly in positive territory, and European markets rebounded after a sharp selloff on Thursday. The dollar rose against rivals after the jobs report, recovering after a sharp slide over the past two sessions. Oil futures fell, while gold prices (GCZ4) slumped Friday in the wake of an upbeat jobs report, turning negative for the year and briefly trading below $1,200 an ounce.