A friendly

employment report has stocks ready to explode higher.

The

Labor Department

reported payrolls increased by 43,000 jobs in February, confounding economists in the

Reuters

poll who predicted 206,000 new jobs. Average hourly wages gained 0.3%, in line with expectations. But the jobless rate edged one-tenth of a percentage point higher, to 4.1%.

Stock futures shot higher on the news. At 9:05 a.m. EST, the

S&P 500

futures were up 17.4, more than 18 points above fair value and indicating a huge rally across the board.

"Everything's up," said Peter Coolidge, managing director of trading at

Brean Murray Foster Securities

. "Fridays lately have been very volatile and mostly negative. Today it's the other way, though if the market gets too overheated today, the sellers might come back."

Maybe. But the in-line print in hourly earnings certainly helps the outlook for stocks, given the market's fears that the

Fed

will feel the need to raise interest rates repeatedly to rein in an economy that, by the government's last estimate, grew 6.9% in the fourth quarter of 1999. The latest poll shows about three-quarters of primary dealers expecting the Fed to hike by 25 basis points at each of its next two meetings -- a trend that has been putting a lot of pressure on the Old Economy stocks that make up so much of the

Dow Jones Industrial Average

and the S&P 500.

The New Economy is an entirely different matter, of course. Because of their high growth rates, their relative freedom from the bond market and their sheer speculative outperformance, technology stocks have thus far withstood four Fed tightenings with nary a shiver.

Yesterday's

Palm

(PALM)

offering seems to have put a minor fly in lubricant of the

Nasdaq Composite Index's

primary momentum engine,

3Com

(COMS)

, though. So the Comp may have to see even more strength in a number of stocks that are already near their all-time highs -- stocks like

Intel

(INTC) - Get Report

,

Cisco

(CSCO) - Get Report

,

Sun Microsystems

TST Recommends

(SUNW) - Get Report

and

Oracle

(ORCL) - Get Report

-- to continue its propulsion further into record territory.

It doesn't look like that's going to be a difficult task this morning. The

Nasdaq 100

futures were lately up 78.5 to 4303.5, indicating some heavy buying in the large-cap tech names at the opening bell.

The Palm IPO was, by all reasonable accounts, a huge success, raising $874 million and instantly carving a $53.4 billion behemoth from the belly of a company that now has about half that market cap. That's a remarkable piece of surgery, though it may also be the latest exemplar of the perils of participating in the early minutes of a hot IPO. Palm opened at 145 and rose to as high as 165 before closing at 95 1/16, offering the following memo to retail investors thinking about chasing a hot offering out of the gate: Use a limit order.

The bond market was much less impressed with the jobs data than were stocks -- particularly with the latter looking as wealth-inducing as they do right now. The 10-year Treasury was up 6/32 to 101 even and yielding 6.362%. The 30-year bond, meanwhile, was up 2/32 to 101 21/32, putting its yield at 6.128%.

The large European indices were solidly higher in afternoon trading. London's

FTSE

was up 68.0, or 1%, to 6500.1, while the Paris

CAC

was up 46.91, or 0.7%, to 6524.46. Frankfurt's

Xetra Dax

was up 72.65, or 0.9%, to 8018.42.

The euro was trading at $0.9641.

Asian markets put in mixed performances.

In Tokyo, the

Nikkei

fell 187.57 to 19,927.54. The yen's comeback against the dollar had investors paring back on export-oriented stocks, since a strong local currency makes domestic goods more expensive for overseas customers.

The dollar traded around 107.66 yen in lethargic overnight trading, and lately stood at 107.75 yen.

Hong Kong's

Hang Seng

climbed 348.43, or 2.1%, to 17,285.24, but the biggest gainer today wasn't a component of that index. Computer maker

Legend

(LGHLY)

rose 17.3% on speculation that the firm could be included in

Morgan Stanley Capital International's China Free

index, and eventually in the Hang Seng itself.

After jumping 8.0% Thursday, South Korea's

Kospi

inched up 0.17 to 894.83.

For a look at stocks in the preopen news, see Stocks to Watch, published separately.