Stocks finished higher Friday, driven by a positive jobs report and continued optimism about a trade agreement between the U.S. and China.
The Dow Jones Industrial Average finished up 337 points, or 1.22%, to 28,015. The S&P 500 rose 0.91% and the Nasdaq advanced 1%.
Ulta Beauty (ULTA) - Get Report, the top gainer on the Nasdaq and the S&P 500, soared 11.1% to $262.20, after the beauty products retailer reported better-than-expected third-quarter earnings. Ulta is Real Money's Stock of the Day.
The U.S. Bureau of Labor Statistics reported that 266,000 new positions were added to the economy last month, almost half again economists' forecasts of a 180,000 gain. The unemployment rate slipped back down to 3.5%, the lowest since 1969.
"It was the strongest report in some time," said CMC Markets analyst David Madden. "A surge in the headline figure and a nice upward revision to the October number, too.
"Given the Fed cut rates three times between June and October, it is fair to say the U.S. central bank [members] are likely to sit on their hands for many months to come."
Alec Young, managing director of global markets research, FTSE Russell, said the stronger-than-expected results help "bolster hopes for a pickup in global growth at a time when leading economic indicators in Europe and China are beginning to exceed low expectations.”
"It’s also a well-timed shot in the arm for investor confidence given ongoing U.S.-China trade uncertainty," Young said.
"Meanwhile, year-over-year wage growth of 3.1%, while healthy, is still insufficient to spark inflation and worries of Fed tightening anytime soon. So, this is very much a Goldilocks report – not too hot, not too cold – and should be welcomed by investors.”
Mike Loewengart, E-Trade’s vice president of investment strategy, said that coming off weaker ADP data, "today’s jobs numbers blew the doors off of expectations."
"Today’s jobs read puts a lot of questions to rest," he said. "It essentially means the Fed’s easing cycle is complete and it puts the U.S. in a stronger position for trade war negotiations."
In addition, the University of Michigan's preliminary sentiment index for December increased to 99.2 from 96.8 in November, exceeding economists' forecasts and reaching a seven-month high.
"Nearly all of the early December gain was among upper-income households, who also reported near record gains in household wealth, largely due to increased stock prices," said Richard Curtin, the survey's chief economist.
"Indeed, among households with incomes in the top third of the distribution, their overall assessment of their current finances was the third highest in the past 20 years."
Meanwhile, China moved to exempt some U.S. soybeans and pork from tariffs, the South China Morning Post reported.
The U.S. is set to impose 15% tariffs on $160 billion of Chinese imports on Dec. 15.
The announcement followed Thursday's comments from Gao Feng, China’s minister of commerce, that negotiators are in “close communication,” indicating an initial deal ahead of the next round of expected tariffs is imminent.
He also emphasized, however, that China continues to press for a rollback of existing tariffs to be included as a part of any resolution.
Beijing imposed tariffs of 25% on U.S. soybeans and pork in July 2018 after Washington slapped punitive duties on Chinese products. That was a response to allegations that American firms in China were being forced to hand over their technologies.
Speaking on CNBC, Larry Kudlow, White House National Economic Council director, said Friday that the U.S. and China are “close” to a trade deal but that the administration was prepared to walk away if it did not get the terms it wanted.
“The president has said many times if the deal is no good, if the assurances with respect to preventing future thefts, if the enforcement procedure is no good, he has said we will not go for it. We will walk away,” Kudlow said.
“The president has said that if we cannot get the enforcement and the assurances, then we will not go forward.”
Jim Cramer, TheStreet.com's founder, said the U.S. should "win the trade war with China."
"With these jobs numbers, hate him or like him, the long game now favors President Trump and the U.S.," Cramer said on Real Money.
"If we stop talking, the Chinese will have to do more than just buy soybeans. They will have to admit that they have been stealing intellectual property for years and admit that they have been dumping goods for years and that they have been hacking our computers for years while flooding our country with killer fentanyl."
Saudi Arabian Oil Co., or Aramco, on Thursday priced its long-anticipated IPO at 32 Saudi rials ($8.53) a share, raising $25.6 billion and topping the previous record IPO held by Alibaba (BABA) - Get Report.
Big Lots (BIG) - Get Report jumped 31.7% to $25.23 after the closeout retailer posted a narrower-than-expected fiscal-third-quarter loss as the company continued to focus on cost-cutting and restructuring, which helped bolster its bottom line.