Surprisingly strong U.S. job gains last month and a decent reading on service-sector activity continued to propel North American stocks higher in midday trading on Friday.
At noon, the Dow Jones industrial average was up 247 points or 1.9 per cent, to 13,126.
The broader S&P 500 was up 28 points or 2.1 per cent, to 1,393. In Canada, the S&P/TSX composite index was up 161 points or 1.4 per cent, to 11,668.
The gains follow the U.S. Labor Department’s payrolls report. Employers added 163,000 jobs in July, which was well ahead of expectations for gains of 100,000. It also snapped a dismal stretch in which previous monthly reports had been showing lacklustre employment gains.
The ISM non-manufacturing report for July, which follows a disappointing report on manufacturing activity this week, came in at 52.6 – in line with expectations and in expansion territory.
The good news on the U.S. economy was strong enough to overshadow disappointments earlier in the week when the Federal Reserve and the European Central Bank dashed expectations that they were close to taking decisive action on stimulating their respective economies. Curiously, though, Friday’s good news does not support the need for the Fed, at least, to stimulate the economy.
Within the S&P 500, the gains were broad, with all 10 subindexes moving higher. Economically-sensitive areas showed the biggest gains, though: Financials and energy stocks rose 2.7 per cent each. Industrials rose 2.4 per cent.
Within the Canadian benchmark index, industrials rose 1.8 per cent, energy stocks rose 1.7 per cent and financials rose 1.2 per cent. Energy stocks got their boost from the price of crude oil, which jumped to $90.62 (U.S.) a barrel, up $3.49.
In Europe, stocks also rose. The U.K.’s FTSE 100 rose 2.2 per cent and Germany’s DAX index rose 3.9 per cent.