NEW YORK (The Street) -- Markets jumped on Friday as October's upbeat jobs report bolstered the view that the U.S. economy can expand with benefits to its workforce even if the Federal Reserve opts to reduce the size of its stimulus program.
The U.S. added 204,000 jobs in October with the unemployment rate rising to 7.3% from 7.2% in the previous month, the Labor Department said Friday. Economists were expecting 120,000 jobs, with the 7.3% jobless rate meeting predictions.
In a week in which stocks were poised to decline, the jobs report sent the S&P 500 higher by 1.3% to 1,770.54, while the Dow Jones Industrial Average jumped 1.1% to 15,761.27. The Nasdaq jumped 1.6% to 3,919.23. For the week, the S&P and Dow rose 0.51% and 0.94%, respectively. The Nasdaq lost 0.07% for the five-day trading period.
"It's a big upside surprise, and of course raises the question, what does the Federal Reserve going to do with stronger economic data in terms of their monetary policy," Ben Garber, an economist at Moody's Analytics said in an interview.
In economic news, U.S. personal income beat forecasts to rise 0.5% in September while personal spending inched up 0.2%, suggesting softer consumption growth but a lift in income growth.
On the downside, consumer sentiment hit a near two-year low in November, according to the Thomson Reuters/University of Michigan's survey on Friday.
The index of consumer sentiment fell to 72.0 -- the lowest since December 2011.
In company news, Gap (GPS) was the top performer in the S&P as share surged 9.8% to $41.43 after saying the apparel-retailer said it expected quarterly profit to beat analysts' estimates.
Twitter (TWTR) shares tumbled 7.2% to $41.65. The company's shares opened at $45.10 on Thursday, exceeding the $26 a share IPO price before closing at $44.90. The offering raised more than $2 billion and valued the business at $18.34 billion.
Priceline (PCLN) shares jumped 4.9% to $1,073.20 after it announced higher third-quarter profit of $833 million or $15.72 a share, up from $597 million in the prior period late on Thursday.
Groupon (GRPN) rose 6.5% to $10.12 despite announcing Thursday that quarterly revenue came in below consensus estimates at $595.1 million. Investors focused on strong growth in North America rather than a decline in international revenue.
Online food delivery service Seamless North America will go public in the latter part of 2014 or early 2015, TheStreet's sister publication TheDeal reported, citing several people familiar with the situation.
Gold for December delivery fell $23.90 to settle at $1,284.60, while oil futures gained 40 cents to $94.60.
Global markets were mostly in the red. Germany's DAX was off 0.03%, while London's FTSE rose 0.16%. The Hang Seng closed 0.60% lower at 22,744.39 while the Nikkei shed 1.00% to settle at 14,086.80. Standard & Poor's downgraded France's credit rating for the second time in under two years, to AA from AA+, pointing to risks for its economy and government finances.
The 10-year U.S. Treasury was plummeting 1 7/32, boosting the yield to 2.751, while the dollar was rising 0.51% to $81.25, according the U.S. dollar index. --Written by Jane Searle and Joe Deaux in New York