MARKET SNAPSHOT: U.S. Stocks Soar After Solid April Jobs Report

By Anora Mahmudova and Barbara Kollmeyer, MarketWatch

Economy adds 223,000 jobs in April, unemployment rate at 5.4%

U.S. stocks soared in early Friday trade with sentiment getting a lift from nonfarm-payrolls data, which pointed to a pace of employment that was healthy enough to suggest that the economy may be on solid footing but not so much so that the Federal Reserve might be spurred to hike rates soon.

The U.S. economy added 223,000 jobs last month, while the unemployment rate fell to 5.4%, largely in line with expectations.

Scott Wren, senior global equity strategist at Wells Fargo Investment Institute, said the jobs number was good but not great and exactly what the market needed to head higher.

"It was a healthy jobs number, indicating the economy is doing OK, but it's unlikely to sway the Federal Reserve too much," Wren said.

The solid employment report put the major indexes on track to finish the week slightly higher after a tumultuous week of trading.

The S&P 500 (SPX) rose 25 points, or 1.2%, to 2,113 with all 10 main sectors trading higher. The Dow Jones Industrial Average (DJI) jumped 252 points, or 1.4% to 18,176.03. The Nasdaq Composite (RIXF) gained 58 points, or 1.2%, to 5,004.61

"Despite the 5.4% unemployment rate, we believe there are still too many people who are part-time or marginally attached, which is why we are not seeing wage increases," Wren said.

JJ Kinahan, chief strategist at TD Ameritrade, said stocks may continue to advance in a low-rate environment as investors chase richer returns than can be obtained in haven-investment like bonds.

"It is a good day for the stock market, but I would agree that the reaction may be a little overdone. As big today's jump is, we are still not breaking out of the range that we had been stuck for months," Kinahan said referring to a range of 2,080 and 2,112 on the S&P 500.

"Certainly, the jobs number took the edge off the disappointing [gross-domestic product] growth in the first quarter, and there is more evidence that March was an anomaly and weather related," Kinahan added.

Friday's data:April jobs numbers (http://www.marketwatch.com/story/us-jobs-creation-springs-back-in-april-with-223000-gain-2015-05-08) reflect a sharp rebound in employment numbers after a revised 85,000 gain in March. The increase in jobs and greater numbers entering the labor force helped the unemployment rate move to 5.4% from 5.5%, marking the lowest level since May 2008, the Labor Department said Friday. Economists polled by MarketWatch had expected a gain of 228,000 nonfarm jobs.

The average hourly wages rose partly 0.1% last month, while wages in the past 12 months have risen at a 2.2% rate.

Job report gives Fed green light to move in September (http://www.marketwatch.com/story/job-report-gives-fed-green-light-to-move-in-september-2015-05-08)

Stocks to Watch:AOL Inc.(AOL) reported first-quarter profit and sales that beat expectations (http://www.marketwatch.com/story/aols-stock-climbs-after-profit-sales-beat-expectations-2015-05-08). Shares jumped 11%.

McDonald's Corp.(MCD) shares rose 2.1% after the company released April sales numbers, which showed a 0.6% -- less than expected by analysts.

Nvidia Corp.(NVDA) shares slid 5.3% after the graphics chip company provided a downbeat sales outlook.

Wal-Mart Stores Inc.(WMT) shares rose 1.2% after the retailer said it would buy locations in Canada (http://www.marketwatch.com/story/wal-mart-to-buy-canadian-locations-from-target-2015-05-08-7103642) from rival Target Corp.(TGT) Target shares also rose 1.2%.

For more on today's notable movers read Movers & Shakers column (http://www.marketwatch.com/story/mcdonalds-aol-liberty-media-in-focus-2015-05-08).

Other markets: The FTSE 100 index surged (http://www.marketwatch.com/storyno-meta-for-guid) on news of an expected election victory (http://www.marketwatch.com/story/conservatives-on-course-for-election-victory-in-the-uk-2015-05-08) in the U.K. for Conservatives. European equity markets rallied, with the benchmark Stoxx 600 (STXX) index gaining more than 2%.

Chinese stocks suffered their biggest weekly loss, though the index managed a gain of 2.3% on Friday. That weekly loss is its worst performance since May 2010.

Oil prices (CLM5) erased earlier gains and were slightly lower. Gold (GCM5) ticked higher. The British pound (http://www.marketwatch.com/story/pound-taps-155-as-conservatives-expected-to-win-uk-election-2015-05-08)(GBPUSD) traded around its highest levels in a week around $1.5430, driven by news that the Conservative party, viewed as market friendly, is on course to take power in the U.K. parliament (http://www.marketwatch.com/story/conservatives-on-course-for-election-victory-in-the-uk-2015-05-08).

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