Stocks rise; interest rates increase

NEW YORK — Stocks climbed Friday after a report showed the U.S. job market is still revving higher, even with the specter of a possible trade war hanging over markets around the world.

The better-than-expected news on jobs helped the S&P 500 more than recover all its losses from earlier in the week. Interest rates and the value of the dollar also rose on expectations that the Federal Reserve got more justification to continue raising interest rates steadily, with its next decision due in about a week and a half.

The S&P 500 index rose 29.35 points, or 1.1 percent, to 2,734.62. For the week, it climbed 0.5 percent after scrambling back from a loss of more than 1 percent earlier.

The Dow Jones industrial average jumped 219.37, or 0.9 percent, to 24,635.21, and the Nasdaq composite rose 112.21, or 1.5 percent, to 7,554.33. The Russell 2000 index of smallcompany stocks rose 14.37, or 0.9 percent, to 1,647.98.

Twice as many stocks rose as fell on the New York Stock Exchange.

Beyond the jobs report, stronger-than-expected readings came in on U.S. manufacturing growth and construction spending. They helped turn attention away from the worries about global trade tensions and European politics that had dragged on stocks in recent weeks.

“It’s refreshing that some strong economic data today took some focus off the trade rhetoric,” said Jon Adams, senior investment strategist at BMO Global Asset Management. “It’s been a banner day for U.S. data overall. You look at the payrolls report, and it’s hard to find too much negative in there.”

The strong reports raise the likelihood that the Federal Reserve could increase shortterm interest rates four times this year, rather than just three. Higher rates can hurt stock prices, but Adams said investors appear relatively prepared for the possibility “because the Fed is hiking for the right reasons.”

The encouraging data helped push the yield on the 10-year Treasury note to 2.90 percent from 2.86 percent late Thursday. The two-year yield, whose movements are dictated more by expectations for Fed movement, rose to 2.48 percent from 2.44 percent.

A quick beneficiary of higher rates can be the banking industry, which would reap bigger profits from making loans. Financial stocks in the S&P 500 rose 1.1 percent.

On the flip side were companies that pay big dividends. Higher rates make bonds more attractive to income investors and pull buyers away from dividend-paying stocks. Utility stocks in the S&P 500 fell 1.5 percent for the largest loss among the index’s 11 sectors.

In commodities markets, benchmark U.S. crude fell $1.23 to settle at $65.81 per barrel. Brent crude, the international standard, fell 77 cents to settle at $76.79.

Gold slipped $5.40 to settle at $1,299.30 per ounce, silver dipped 2 cents to $16.44 per ounce and copper rose 3 cents to $3.10 per pound.