June 7, 2013 at 4:59 PM ET
Stocks closed more than 200 points higher on Friday as the monthly employment report suggested economic growth is tepid enough for the Federal Reserve to maintain its bond-buying program.
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The Dow Jones Industrial Average shot up 207.5 points, or 1.38 percent to close at 15,248.12, boosted by Boeing and Disney. The Dow had its second best day of the year -- only the first trading session of the year was better.
For the week, the Dow gained 0.9 percent, the S&P 500 added 0.8 percent and the Nasdaq rose 0.4 percent.
Most key S&P sectors ended higher, led by industrials and consumer discretionary.
"I think you want to get more cyclical as the summer progresses [because] the economy actually is starting to get a little bit better," said John Manley, chief equity strategist at Wells Fargo Funds Management. "The economy is weak and getting better—I want to own the stock market when things are bad and going to good."
Stocks had gyrated in rocky trading Thursday as the U.S. dollar tumbled against the yen and amid ongoing questions over the murky future of the central bank's stimulus program. Major averages eventually finished at session highs and the Dow regained its footing above the psychologically-important 15,000 level.
"There are things going on in Japan that may come back to haunt us, but buying the dip here is giving us a big rebound here," said Art Cashin, director of floor operations at UBS Financial Services.
(Read More: Yen Rally Sends Shock and Selling Through Markets)
The U.S. added 175,000 jobs in May, according to the Labor Department, indicating the economy was expanding modestly, but not enough to convince the Federal Reserve to pare back its bond-buying program. The unemployment rate edged up to 7.6 percent. Economists surveyed by Reuters expected a gain of 170,000 jobs with the rate holding steady at 7.5 percent.
"I'm disappointed. This number was not that impressive and I don't see a lift off that we should have seen by now if QE (quantitative easing) was working—we were barely above the consensus, but for it to be a really good number, it had to be above 200,000," said Doug Cote, chief market strategist at ING U.S. Investment Management. "And judging by this number, it's clear that QE3 is not creating sustainable growth."
Employment is a key indicator for the Federal Reserve, and Chairman Ben Bernanke has indicated the central bank could start tapering off its $85 billion bond purchases if the jobs market shows consistent improvement. Other Fed officials have also fanned expectations they are prepared to consider downsizing the asset purchase program.
Meanwhile, former Fed Chairman Alan Greenspan told CNBC that the central bank should start to taper its $85 billion a month bond-buying program even if the economy is not ready for it, saying that the near-zero interest rate policy has helped stock prices, but the markets need to be prepared for faster-than-expected rise in rates.
"QE is a temporary phenomenon for the market and ultimately, as soon as [the Fed support] ends or tapers off, the market would lose major support," said Cote.
Also on the economic front, consumer credit rose $11.1 billion in April after March's $8.4 billion increase. Economists polled by Reuters forecast a $12.5 billion gain.
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