Jobs Data Ignite Rally on Wall Street; Dow Soars 217 Points

FOX Business: The Power to Prosper

The markets roared higher on Friday as traders cheered a better-than-expected report on the U.S. labor market.

Today's Markets

The Dow Jones Industrial Average jumped 217 points, or 1.7%, to 13096, the S&P 500 gained 26 points, or 1.9%, to 1391 and the Nasdaq Composite rallied 58.1 points, or 2%, to 2968.

The European Central Bank disappointed Wall Street on Thursday after it failed to take decisive steps to stem the debt crisis that has been ongoing for more than two years. The mood was more upbeat on Friday, however, as all eyes turned to the U.S. Labor Department and traders scooped up assets that were beaten down in the prior session.

The U.S. economy added 163,000 jobs in July, better than the 100,000 gain Wall Street was expecting. The unemployment rate rose 0.1-percentage point to 8.3%, compared with forecasts that it would hold steady.

"The report will alleviate fears that the U.S. might be tipping back into recession," IHS Global Insight Chief U.S. econmist Nigel Gault wrote in a research note. "But uncertainties over the strength of global growth, the eurozone crisis, the fiscal cliff and the November elections are giving plenty of reasons for caution."

Digging into the report, the labor force participation rate, which provides a look at what proportion of the population is either employed or actively seeking employment, fell 0.1-percentage point to 63.7%.

The labor market, which has hit stall speed recently, has been a major focus in New York and Washington, D.C.The Federal Reserve has repeatedly noted its concern over the slowing employment growth. The central bank has said it will keep interest rates at historic lows until late 2014, and renewed its Operation Twist program, but hasn't yet been willing to unleash another round of quantitative easing.

There has been talk across world trading desks that such a move could come in September, but many analysts say it will hinge on data that are received, including the employment report.

Elsewhere, oil prices rallied. The benchmark crude oil contract traded in New York surged $4.27, or 4.9%, to $91.40 a barrel. Wholesale New York Harbor gasoline jumped 2.1% to $2.931 a gallon.

In metals, gold gained $18.60, or 1.2%, to $1,609 a troy ounce.

On the corporate front, Procter & Gamble (NYSE:PG) posted a fiscal fourth quarter core profit of 82 cents a share, which excludes 8 cents of non-core charges. Analysts were expecting the Dow component to earn 77 cents. Sales came in at $20.2 billion, slightly shy of the $20.26 billion expected.

Foreign Markets

The Euro Stoxx 50 soared 4.8% to 2371, the English FTSE 100 rallied 2.2% to 5787 and the German DAX jumped 3.9% to 6866.

In Asia, the Japanese Nikkei 225 sold off by 1.1% to 8555 and the Chinese Hang Seng slipped 0.12% to 19666.