Stocks Mostly Higher On Upbeat Jobs Report - U.S. Commentary

(RTTNews) - After fluctuating earlier in the session, stocks are mostly higher in afternoon trading on Friday. The markets have benefited from a positive reaction to the Labor Department's closely watched monthly employment report.

The major averages have moved roughly sideways in recent trading, hovering near their best levels of the day. The Dow is up 93.13 points or 0.6 percent at 15,081.68, the Nasdaq is up 21.19 points or 0.6 percent at 3,464.86 and the S&P 500 is up 9.95 points or 0.6 percent at 1,625.36.

The strength on Wall Street comes following the release of the report from the Labor Department showing stronger than expected job growth in the month of June.

The report said non-farm payroll employment increased by 195,000 jobs in June, matching the revised job growth seen in May. Economists had been expecting employment to increase by about 165,000 jobs.

Despite the stronger than expected job growth, the unemployment rate came in unchanged at 7.6 percent. The unemployment rate had been expected to edge down to 7.5 percent.

While the strong job growth has generated some optimism about the economic outlook, the report does not seem to have raised concerns about the Federal Reserve's stimulus program due to the unemployment rate holding steady.

The Fed has indicated that it will maintain its asset purchase program at the current pace until the unemployment rate drops closer to 7 percent.

Buying interest has also been generated in reaction to the remarks European Central Bank President Mario Draghi delivered while the U.S. markets were closed on Thursday.

In a press conference after the ECB announced its decision to leave interest rates unchanged, Draghi said rates are likely to remain low for an extended period of time.

Sector News

Banking stocks are turning in some of the market's best performances in mid-day trading, resulting in a 1.9 percent gain by the KBW Bank Index. With the gain, the index has risen to its best intraday level in almost five years.

Within the banking sector, Zions Bancorp (ZION) and SunTrust Banks (STI) are posting standout gains, with both stocks rising by 3.6 percent.

Considerable strength also remains visible among brokerage stocks, as reflected by the 1.8 percent gain being posted by the NYSE Arca Broker/Dealer Index. The strong gain has lifted the index to a two-year intraday high.

Trucking, oil service, and biotechnology stocks are also seeing significant strength on the day, adding to recent gains.

Meanwhile, gold stocks have moved sharply lower, dragging the NYSE Arca Gold Bugs Index down by 5.5 percent. The weakness in the sector comes as gold for August delivery has plunged by $37.30 to $1,214.60 an ounce.

Housing stocks have also come under pressure over the course of the session, resulting in a 2.6 percent drop by the Philadelphia Housing Sector Index. Commercial real estate and steel stocks are also posting notable losses.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Friday. Japan's Nikkei 225 Index surged up by 2.1 percent, while Hong Kong's Hang Seng Index jumped by 1.9 percent.

Meanwhile, the major European markets moved to the downside on the day. While the U.K.'s FTSE 100 Index fell by 0.7 percent, the French CAC 40 Index tumbled by 1.5 percent and the German DAX Index plunged by 2.4 percent.

In the bond market, treasuries have fallen sharply in reaction to the upbeat monthly jobs report. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, has jumped by 21 basis points to 2.711 percent.