U.S. stocks rose on Friday, lifting the Dow and S&P 500 into uncharted terrain and posting a seventh week of gains, as investors embraced a stronger-than-forecast November payrolls report as backing the view the economy can handle rate hikes by the Federal Reserve in 2015.
"This is really a phenomenal day. We have the pieces of the U.S. economy coming together, with robust jobs growth, falling gas prices giving consumers lots of confidence to spend money, and low interest rates. It's a great holiday gift going into the end of the year," said Jeff Kravetz, a regional investment strategist at U.S. Bank Wealth Management in Phoenix
"We're seeing further confirmation that the U.S. economy can stand on its own two feet, that life goes on when the Fed is no longer buying assets," said Jeff Greenberg, senior economist at J.P. Morgan Private Bank.
U.S. employers created 321,000 jobs last month, the largest gain since January 2012, and topped the most cheery estimates. The unemployment rate remained unchanged at a six-year low of 5.8 percent, and hourly earnings increased 0.4 percent.
"It was a great report, there are no two ways about it. The highest estimate I had seen was 275,000," said JJ Kinahan, chief market strategist at T.D. Ameritrade.
Stock-index futures reversed direction several times in the wake of the data, and benchmark Treasury yields shot higher.
"This report is first reflected in the rates market, and impacted yields quickly, so the shock was there, and that threw the equity markets," said Greenberg.
The initial reaction in equities is the market's "futile attempt to say this means the Fed is going to move earlier, and you should see yields trending higher in an improving economy," said Art Hogan, chief market strategist at Wunderlich Securities, referring to the notion that the report could move up the timing of Fed's rate increases.
Another report Friday had orders for U.S. factory goods falling 0.7 percent in October.