Stocks end day higher on job gains

A seesaw start to the stock market ended with a rally Friday, as traders bet that robust hiring would boost the economy.

After the government reported strong hiring for June, traders and investors struggled over how to react. At first, they pushed stocks higher because the report was better than expected. Then they pushed stocks lower because the improving jobs market made it more likely that the Federal Reserve would scale back its economic stimulus.

After waffling early, investors finally settled on an optimistic outlook.

“In general, I think our economy is standing on its own two feet right now,” said David Brown, chief market strategist at Sabrient Systems, a Santa Barbara research firm for institutional investors.

The Dow Jones industrial average gained 147.29 points to 15,135.84. The Standard & Poor’s 500 index advanced 16.48 points to 1,631.89, while the Nasdaq composite index climbed 35.71 points to 3,479.38.

The whiplash day illustrated the complex and outsized role that the Fed has played on stock market results in recent weeks.

That’s because the Federal Reserve, led by Chairman Ben S. Bernanke, has been propping up the economy by buying bonds and keeping interest rates low. Investors know that the Fed isn’t going to continue the stimulus forever, but they worry that developments like Friday’s positive jobs report could make the Fed yank away the stimulus too soon.

The jobs picture “gives Bernanke more of a mandate” to rein in Fed stimulus programs, Brown said.

As investors bought stocks, they sold bonds, another sign that they think the Fed will tamp down its bond buying. The yield on the 10-year Treasury note jumped dramatically to 2.74% from late Wednesday’s level of 2.50%. That was the highest rate since August 2011.

Relatively few shares changed hands Friday because many traders were still on vacation after the Fourth of July holiday Thursday.