U.S. Stocks Continue To Turn In Strong Performance In Afternoon Trading

(RTTNews) - Stocks showed a notable move to the upside early in the session on Friday and continue to turn in a strong performance in afternoon trading. The major averages are extending the advance seen in the previous session, with the Nasdaq reaching its best intraday level in well over a year.

Currently, the major averages are just off their highs of the session. The Dow is up 664.40 points or 2.0 percent at 33,725.97, the Nasdaq is up 142.96 points or 1.1 percent at 13,243.95 and the S&P 500 is up 62.36 points or 1.5 percent at 4,283.38.

The continued strength on Wall Street comes following the release of a closely watched Labor Department report showing U.S. employment surged by much more than expected in the month of May.

The report showed non-farm employment soared by 339,000 jobs in May after spiking by an upwardly revised 294,000 jobs in April.

Economists had expected employment to climb by 190,000 jobs compared to the jump of 253,000 jobs originally reported for the previous month.

Meanwhile, the Labor Department said the unemployment rate rose to 3.7 percent in May from 3.4 percent in April. The unemployment rate was expected to inch up to 3.5 percent.

"It's hard to say which is the bigger surprise, the huge, unexpected rise in payrolls or the equally huge, unexpected rise in the unemployment rate," said Chris Low, Chief Economist at FHN Financial.

"From the Fed's perspective, the rise in unemployment coupled with the drop in average hourly earnings should outweigh the shock of another huge job gain," he added. "After all, the weaker numbers stand in support of a pause they were leaning toward anyway."

Positive sentiment has also been generated in reaction to news the Senate voted to pass the bill raising the U.S. debt ceiling late Thursday night.

The Senate voted 63 to 36 in favor of the debt ceiling bill, with 17 Republicans joining with the majority of Democrats to approve the legislation.

Following the House approval of the bill Wednesday night, the bill now heads to President Joe Biden, who is expected to sign the legislation later today.

"No one gets everything they want in a negotiation, but make no mistake: this bipartisan agreement is a big win for our economy and the American people," Biden said in a statement following the Senate vote.

The passage of the bill eliminates the threat of a potentially disastrous default by the U.S. government, which had been hanging over the markets in recent weeks.

Sector News

Steel stocks continue to turn in some of the market's best performances, resulting in a 5.2 percent spike by the NYSE Arca Steel Index. The index continues to regain ground after ending Wednesday's trading at its lowest closing level in over six months.

Substantial strength also remains visible among oil service stocks, as reflected by the 5.0 percent surge by the Philadelphia Oil Service Index.

The rally by oil service stocks comes amid a sharp increase by the price of crude oil, with crude for July delivery jumping $1.58 to $71.68 a barrel.

Banking stocks have also shown a strong move to the upside on the day, driving the KBW Bank Index up by 4.0 percent.

Airline, chemical and brokerage stocks are also seeing considerable strength on the day, moving higher along with most of the other major sectors.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Friday. Japan's Nikkei 225 Index shot up by 1.2 percent, while Hong Kong's Hang Seng Index soared by 4.0 percent.

The major European markets have also moved to the upside on the day. While the French CAC 40 Index spiked by 1.9 percent, the U.K.'s FTSE 100 Index surged by 1.6 percent and the German DAX Index jumped by 1.3 percent.

In the bond market, treasuries are giving back ground after moving higher over the three previous sessions. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is up by 7.1 basis points at 3.679 percent.