After Market: Surprisingly Strong Jobs Numbers Spark Stock Rally

Stocks bounced back Friday on a second straight day of surprisingly good economic news. The Dow Industrials (^DJI) gained 167 points, ending the week at another record high of 15,762. The S&P 500 (^GPSC) rose 23 to 1,771, and the Nasdaq (^IXIC) rallied 62 points to 3,919. And after some big swings, the major averages were mostly higher for the full week.

The Labor Department reported the economy added 204,000 jobs last month, despite the 16-day government shutdown in October. That was nearly double the consensus expectation. The market of late hasn't always cheered strong economic numbers because of fears that an improving climate could prompt the Federal Reserve to finally begin to taper its massive economic stimulus program. But in this case, good news was indeed good news.

Portrait of black business woman shaking hands

Still, bond prices tumbled on signs the economy is gaining strength. That sent the yield on the 10-year Treasury soaring to 2.76 percent.

Among the best performing blue chips: JPMorgan Chase (JPM), up 4 percent; Merck (MRK) up 2 percent; and Walt Disney (DIS), up 2 percent. Disney posted solid earnings and agreed to produce several series of live-action TV shows based on Marvel superheroes, exclusively for Netflix (NFLX).

Airline stocks found plenty of blue sky. United Continental (UAL) rose 4 percent. The airlines are getting help from a stronger economy and declining oil prices.

Other Big Movers on Friday:

  • Priceline (PCLN) rose 5 percent (that's 50 dollars a share) and Groupon jumped 6 percent –- both on continued earnings growth.

  • Gap (GPS) rallied more than 9 percent on much better than expected sales in October.

  • And Santarus (SNTS) soared 37 percent after agreeing to be acquired by Salix Pharmaceuticals for $2.6 billion.

  • On the downside, Twitter (TWTR) ran out of momentum after all of the excitement over its IPO on Thursday. The stock fell nearly 9 percent.

  • And homebuilders got hammered. Pulte (PHA), Lennar (LEN) and Ryland (RYL) all lost about 4 percent, hurt by the steep rise in interest rates. Higher mortgage rates make new homes less affordable, especially for first -time buyers.

  • And NetSol Technologies (NTWK), an IT applications firm, tumbled 30 percent after posting a big drop in earnings.

What to Watch Monday:

  • The bond market is closed for Veterans Day, but U.S. stock markets are open.

  • New Corp. (NWS) and Sotheby's (BID) report quarterly results after the market closes.