NEW YORK (TheStreet) -- Bank stocks surged Friday as a stronger-than-expected jobs report fueled a rally across major U.S. equity markets.
The Bureau of Labor Statistics reported non-farm payrolls rose by 195,000 in June as the unemployment rate remained unchanged at 7.6%. Economists polled by Thomson Reuters anticipated non-farm payrolls to have added 165,000 jobs.
The report upwardly revised May employment numbers to 195,000 from 175,000. The 12-month average sits at 182,000 jobs added per month.
The strong labor numbers suggested that the Fed could begin to taper its quantitative easing efforts as early as September, as indicated by the central bank Chairman last month. Yields on the 10-year Treasury rose to 2.726%Concerns that June's encouraging jobs report could prompt the Fed to curb its stimulus measures were offset by prospects that the U.S. economic recovery may be gaining sufficient strength to survive on its own. Financials were among the biggest winners on Friday. Shares of the biggest four banks --Bank of America (BAC) JPMorgan Chase (JPM), Citigroup (C) and Wells Fargo (WFC) rose by 1.8%, 2.3%, 1.8% and 2% respectively. Regional banks, which given their domestic focus are more levered to the economy than universal banks, outperformed on Friday. Shares of KeyCorp (KEY) and SunTrust (STI) and Zions (ZION) rose more than 4%. Banks had a strong week, with the KBW Bank Index rising 6%. Earlier this week, the Federal Reserve finalized capital rules under Basel III, but warned that too-big-to-fail banks can expect more rules that would raise their capital requirements as early as next week. However, analysts at Fitch Ratings said Friday that the big banks can meet tougher capital requirements. Banks also kick off earnings next week, with JPMorgan Chase as usual opening the season with its results announcement on Friday. -- Written by Shanthi Bharatwaj in New York.
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