Stocks Roar Higher as Traders Cheer Jobs Data

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The markets posted big gains in thin trading on Friday as market participants reacted to a strong report on the labor market and dovish European Central Bank commentary.

Today's Markets

According to preliminary calculations, the Dow Jones Industrial Average rose 147 points, or 0.98%, to 15135, the S&P 500 jumped 16.5 points, or 1%, to 1632 and the Nasdaq Composite advanced 35.7 points, or 1%, points to 3479.

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.