By Alexander Osipovich and Avantika Chilkoti 

U.S. stocks and government-bond yields rose Friday after a surprisingly upbeat monthly jobs report signaled strength in the U.S. economy, offsetting some of the jitters about trade that rattled investors earlier in the week.

The Dow Jones Industrial Average advanced 337.27 points, or 1.2%, to 28015.06. The S&P 500 added 28.48 points, or 0.9%, to 3145.91, and the Nasdaq Composite rose 85.83 points, or 1%, to 8656.53.

Employers added 266,000 jobs in November and unemployment matched a 50-year low of 3.5%, signs the U.S. economy is withstanding a global slowdown. Those numbers beat the projections of economists surveyed by The Wall Street Journal who estimated nonfarm payrolls increased by 187,000 and the unemployment rate remained at 3.6%.

Haven assets like gold and Treasurys slid, lifting the yield on the benchmark 10-year U.S. Treasury note to 1.842%, from 1.795% on Thursday, and sending gold futures down 1.2%.

"It's a very solid jobs report," said Michael Arone, chief investment strategist at State Street Global Advisors. "Since August you have seen recession fears recede, and this report continues to show that the U.S. economy is on a firm footing."

Household spending has proved to be crucial this year for U.S. economic growth, though the Federal Reserve has also cut rates three times to help bolster output amid rising fears of a global slowdown.

The jobs report suggests that the Fed will keep interest rates on hold for the foreseeable future, analysts said. The key rate-setting committee of the U.S. central bank is set to meet next week, but Fed watchers expect it to keep rates steady in light of the positive economic data and its cuts earlier this year.

Meanwhile, new survey data released Friday showed Americans' economic outlook has improved in recent weeks. The University of Michigan's main index of consumer sentiment was 99.2 in early December, higher than the 96.8 reading in late November. Consumer spending has been one of the primary reasons for the resilience of the U.S. economy this year.

U.S.-China trade talks also remain in the spotlight for markets ahead of the Dec. 15 deadline for new tariffs on consumer goods to take effect.

At the end of a week that has seen markets react to conflicting signals on the progress of negotiations, China's State Council on Friday began the process of exempting some soybeans and pork imported from the U.S. from punitive tariffs, the state-run Xinhua News Agency said.

"I don't think there will be anything signed by the 15th, but they may well kick it into next year," said Tom Roderick, a portfolio manager at London-based hedge fund Trium Capital, adding that "both sides are playing nice at the moment" with little incentive to escalate tariffs.

Despite a rough start to December, major U.S. stock indexes are trading just below their records from late last month. Friday's rally helped the S&P 500 secure a modest weekly gain. The Dow industrials and the tech-heavy Nasdaq Composite were in the red for the week.

President Trump lauded the stock market's 2019 rally just before the jobs report, saying on Twitter, "Stock Markets Up Record Numbers. For this year alone, Dow up 18.65%, S&P up 24.36%, Nasdaq Composite up 29.17%. 'It's the economy, stupid.'"

Shares of Ulta Beauty surged $26.18, or 11%, to $262.20 after the cosmetics company reported higher sales in the latest quarter and raised its earnings forecast.

Zoom Video Communications tumbled $6.93, or 10%, to $62.74 after it reported quarterly revenue that exceeded analysts' forecasts, but fell short of some investors' lofty expectations. Several analysts cut their price targets for the videoconferencing company, which went public in April in one of the year's hottest initial public offerings.

In commodities, U.S. crude oil futures rose 1.3% to $59.20 a barrel after Saudi Arabia and other large oil-exporting countries signaled that they would cut production.

Overseas, the benchmark Stoxx Europe 600 index climbed 1.2%. In Asia, the Shanghai Composite Index gained 0.4%, while the Hang Seng rallied 1.1%.

U.K. markets remained volatile ahead of a general election next week. The FTSE 100 rallied 1.4% on Friday, lifted by the U.S. jobs data and speculation that Prime Minister Boris Johnson's Conservative Party will win the vote. Such an outcome would reduce uncertainty around the U.K.'s withdrawal from the European Union.

"The way the polls look at the moment, it's not going to be a narrow majority open to hostage-taking," said Mr. Roderick.

Write to Alexander Osipovich at alexander.osipovich@dowjones.com and Avantika Chilkoti at Avantika.Chilkoti@wsj.com

 

(END) Dow Jones Newswires

December 06, 2019 16:52 ET (21:52 GMT)

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