US stocks surge as jobs report hits 'sweet spot'

NEW YORK (AFP) - Wall Street stocks surged on Friday after the Labour Department reported the US economy added a solid 223,000 jobs in April and unemployment fell to a seven-year low of 5.4 per cent.

The Dow Jones Industrial Average powered 267.05 points (1.49 per cent) higher to 18,191.11.

The broad-based S&P 500 jumped 28.10 (1.35 per cent) to 2,116.10, while the tech-rich Nasdaq Composite Index gained 58.00 (1.17 per cent) at 5,003.55.

The April labour data marked a big improvement from March, when the US added just 85,000 jobs.

At the same time, the US labour market showed some signs of weakness, with wages barely growing and underemployment still elevated.

The jobs data "came in at a sweet spot" for Wall Street, said David Levy, portfolio manager at Kenjol Capital Management.

The report was much better than in March, but "was not so strong as to suggest the Federal Reserve may actually raise rates next month," he said.

Many economists said the jobs data suggested the Fed likely would wait until September or later in its plan to lift the near-zero federal funds rate this year.

The equity gains were broad-based, with all 30 members of the Dow finishing in the green. Apple rose 1.8 per cent, Boeing advanced 2.8 per cent and Goldman Sachs added 1.6 per cent.

Biotech stocks performed especially well. Amgen advanced 2.8 per cent and Biogen rose 4 per cent.

Dow member McDonald's rose 1.5 per cent on news that April global comparable sales fell 0.6 per cent, less than the 1.9 per cent drop projected by analysts. The fast-food chain unveiled a turnaround plan earlier this week following a succession of weak results.

Visa, another Dow component, rose 4.3 per cent following a Bloomberg News report that it is in talks to buy its former subsidiary, Visa Europe, for as much as US$20 billion (S$26 billion).

Swiss farm chemicals powerhouse Syngenta bolted 11.4 per cent higher following its rejection of a US$45 billion takeover proposal by US seed giant Monsanto, saying the bid undervalues the company. Monsanto gained 1.4 per cent.

Yelp rose for a second day in a row following reports the online listings and reviews company put itself up for sale, advancing 6.2 per cent after jumping 23 per cent on Thursday.

Bond prices rose. The yield on the 10-year US Treasury fell to 2.14 per cent from 2.18 per cent Thursday, while the 30-year dipped to 2.90 per cent from 2.91 per cent. Bond prices and yields move inversely.

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