Stocks close near record high, fueled by strong jobs report

U.S. stocks surged Friday, finishing just short of record highs, as investors responded enthusiastically to a strong June job market report.

The buying accelerated throughout the day after the Labor Department said U.S. employers added 287,000 jobs last month. That was far more than analysts expected, and after weak reports from April and May, it suggests the economy and job market haven’t run out of steam.

“It was a strong report, and it put to bed worries that we were seeing the job market sputter,” said Kate Warne, investment strategist for Edward Jones.

Mining and materials companies, which stand to benefit more than other industries from an accelerating economy, took the biggest gains. Machinery makers also jumped. Only eight stocks on the Standard & Poor’s 500 finished lower.

The Dow Jones industrial average surged 250.86 points, or 1.4%, to 18,146.74. The S&P 500 rose 32 points, or 1.5%, to 2,129.90. The Nasdaq composite advanced 79.95 points, or 1.6%, to 4,956.76.

The government said the unemployment rate rose slightly as more people looked for jobs. There also was evidence that wages were rising faster. The April and May reports worried investors, in part because they came after the economy grew just 1.1% over the first three months of 2016. The U.S. economy has been growing for more than six years, and investors are wary that that streak could end.

Among material and industrial companies, paint and coatings maker PPG Industries advanced 3.2% to $106.32, and aluminum producer Alcoa climbed 5.2% to $9.82. Machinery maker Caterpillar rose 3.1% to $77.37, and aerospace company Boeing went up 2.3% to $130.09.

Gap shares climbed after the San Francisco-based retailer said sales at stores open at least a year grew in June, powered by Old Navy results. Sales at those stores are considered an important measure of retailers’ results, and Thomson Reuters said it was the first improvement in that gauge for Gap in more than a year. Analysts had expected another decline this month. Gap stock rose 4.9% to $22.70. The stock is down 8% this year.

Video-conferencing equipment maker Polycom said it will be taken private by Siris Capital. The San Jose company accepted an offer from Siris worth $12.50 per share, or $1.7 billion. Polycom had accepted an offer from Mitel Networks in April. Shares of Polycom rose 12.7% to $12.25. Mitel, which will get a $60-million payment from Polycom, leaped 19.8% to $7.21.

The S&P 500 closed less than a point away from the all-time high it set in May 2015. The Dow, too, was near a record. They reached those peaks before investors got very worried about the slowdown in China’s economy, before the Federal Reserve started raising interest rates for the first time in almost nine years and before anyone thought Britain might really vote to leave the European Union.

Stocks have recovered from those concerns, but it’s been a very careful, uneasy rally. The stocks that have done the best in the past year are phone companies and utilities, which pay big dividends and are considered safe. U.S. bond yields have set all-time lows in the past few days. Gold is at its highest price in two years.

U.S. economic growth has been steady but uninspiring, and corporate profits and revenues are in a slump. But the alternatives don’t look any better. China has been shaky. The economies of Japan and Europe are weak, and the yields on some European bonds are negative as nations try to boost their economic growth. That means investors have to pay to own those bonds. So even if U.S. stocks aren’t setting the world alight, they’ve been good enough.

“I don’t think investors are nearly as excited as they would typically be in an environment where stocks are close to record highs,” Warne said.

The yield on the 10-year Treasury note fell to 1.36% from 1.39% — far below the 2.29% level where it began the year. When demand for bonds is high, their prices rise and yields fall. That has the effect of sending down interest rates on many kinds of loans, including mortgages, since those rates are tied to bond yields.

Drug developer Juno Therapeutics said it halted a mid-stage study on a potential leukemia treatment after two patients died. The study involved the company’s most advanced experimental drug, and Juno said the deaths of the patients came after an additional chemotherapy drug was added to their treatment. The stock dived 31.9% to $27.81.

Barracuda Networks jumped 18.8% to $18.42 after the cloud-based security and storage service company, based in Campbell, Calif., reported solid quarterly results and raised its projections for the year.

PriceSmart slumped 8.9% to $83.39 after the San Diego-based warehouse club operator reported disappointing results for its fiscal third quarter.

Energy prices were slightly higher. Benchmark U.S. crude advanced 27 cents to $45.41 a barrel. Brent crude, a standard for international oil prices, went up 36 cents to 46.76 a barrel.

Wholesale gasoline rose 1 cent to $1.37 a gallon. Heating oil remained at $1.41 a gallon. Natural gas added 2 cents to $2.80 per 1,000 cubic feet.

Gold fell $3.70 to $1,358.40 an ounce. Silver rose 26 cents, or 1.3%, to $20.10 an ounce. Copper held steady at $2.12 a pound.

Germany’s DAX jumped 2.2%, and the CAC-40 in France was up 1.8%. In Britain, the FTSE 100 advanced 0.9%. Japan’s Nikkei 225 closed down 1.1%. Hong Kong’s Hang Seng index shed 0.7%, and South Korea’s KOSPI lost 0.6%.

The dollar fell to 100.46 yen from 100.76 yen. The euro slipped to $1.1049 from $1.1055. The British pound rose to $1.2952 from $1.2896.

UPDATES:

2:27 p.m.: This article was updated with additional information.

1:20 p.m.: This article was updated with closing prices.

9:17 a.m.: This article was updated with more recent market information.

This article was originally published at 7:09 a.m.