US stocks jump as job data beats estimates

All main US stock indexes rose on Friday boosted by closely followed jobs data which beat forecasts. Standard & Poor’s 500 Index recorded its biggest rally in three weeks. The benchmark added 1%, the most since June 13, advancing 1.6% for the week. The Dow Jones Industrial Average gained  1%.

“The jobs report is pretty strong. It’s a good number for equities because it’s supportive for earnings growth, which is what we need,” Matthew Peron, head of active equities at Northern Trust Corp. in Chicago, said by telephone for Bloomberg. “We have to digest the backup in yields, we have to see how far do they go and get used to that level of rates.” he added.

Non-farm payrolls rose by 195,000 workers for a second straight month, the Labor Department reported on Friday. The median forecast in a Bloomberg survey projected a 165,000 gain after a previously reported 175,000 increase in May. The jobless rate stayed at 7.6 percent, while hourly earnings in the year ended in June advanced by the most since July 2011. Some analyst explain the substantial boost in employment with seasonal changes.

The S&P index have lost 2.2% since the Federal Bank Chairman Ben Bernanke point out a time frame in which government would ease the bond-purchasing stimulus program.

In corporate news,  Alcoa Inc. will unofficially start the second-quarter earnings season as the biggest U.S. aluminum producer will report results after the market close on July 8. Nine of the 10 S&P 500 industries jumped as financial, industrial and health-care companies rose more than 1.3%. JP Morgan added 2.3% and Bank of America Corp. advanced 1.8%.

Tesla Motors Inc. rose 4.2% to a record $120.09 after saying it received hundreds of orders for its Model S sedan, enough to double the number of electric cars on Hong Kong’s streets. The company, headed by billionaire Chief Executive Officer Elon Musk has forecast it will sell 21,000 units of the Model S globally this year.

Regional banks recorded gains as KeyCorp, Ohio’s second-largest bank soared 5%.

Home builders, gold producers all plunged by significant percentages as Bloomberg real estate index tumbled and gold price fell by 3%.

“We know this is not going to be a terrific earnings season,” Northern Trust’s Peron said. “The focus will be on guidance – are we going to get improvement as the year continues, which is in expectation? The criticism of the market has been that it has been supported by Fed actions and now this is the time for that hand-off to happen.” he added for Bloomberg.