Stock Futures Soar on Jobs Data, ECB News


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U.S. stock-index futures rallied Friday as traders cheered stronger than expected data on the American labor market and dovish commentary from central banks in Europe.

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As of 8:43 a.m. ET, Dow Jones Industrial Average futures jumped 146 points to 15061, S&P 500 futures rallied 15.5 points to 1625 and Nasdaq 100 futures advanced 25.8 points to 2963.

The Labor Department said nonfarm payrolls jumped by 195,000 in June, coming in well above expectations of 165,000. Previous months were also revised higher by 70,000 in total. The unemployment rate held steady at 7.6%, compared to expectations that it would fall to 7.5%. Meanwhile, the labor force participation rate rose by 0.1 percentage point to 63.5%.

Traders generally saw the data as an indication the labor market continues to improve. Dan Greenhaus, chief global strategist at BTIG, said the report was "pretty darn good," citing the strong headline figures and also the upward revision.

The data have taken on even more significance in recent months because the Federal Reserve has said it will only begin boosting interest rates from crisis-era levels once the labor market makes substantial improvements. Fed Chairman Ben Bernanke said last month that equates to an unemployment rate around 7%.

"A tapering of the Fed’s massive quantitative easing program is looking increasingly likely to start in the next few months after much better than expected job creation in the second quarter," said Chris Williamson, chief economist at Markit.

Indeed, Treasury bonds sold off on the back of the report. The benchmark 10-year yield jumped 0.175 percentage point to 2.685%.

It wasn't only America that celebrated July Fourth on Thursday. European markets surged in their best day in more than two months on the back of a pledge from European Central Bank President Mario Draghi to keep interest rates low for an extended period of time. The Bank of England also signaled it would keep rates low for a long time to come.

In commodities, U.S. oil prices climbed 83 cents, or 0.81%, to $102.07 a barrel. Gold dropped $29.70, or 2.4%, to $1,222 a troy ounce.

On the corporate front, Samsung Electronics saw its shares fall sharply on a disappointment second-quarter forecast.

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