Stocks surge 1% on strong jobs report

NEW YORK -- The Dow Jones industrial average surged nearly 200 points Friday after the U.S. Labor Department reported the economy gained 203,000 new jobs in November, beating expectations.

The Dow added 198.69 points, or 1.3%, closing at 16,020.20. The broader Standard & Poor’s 500 index gained 20.06, or 1.1%, to 1,805.09. The tech-focused Nasdaq composite index rose 29.36, or 0.7%, to 4,062.52.

Investors brushed aside worry that an improving labor market might push the Federal Reserve to ease off its monetary stimulus sooner rather than later.

The Fed’s program has helped fuel this year’s stock rally, which has lifted the Dow 22% as of Friday afternoon.

“The Street is waking up to the fact that good news really is good news, not bad news,” said Alan Whitman, managing director at Morgan Stanley Wealth Management in Pasadena. “It means the economy is able to carry itself on its own, and that’s really what we want.”

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Wall Street has been obsessing over when the Fed will begin scaling back its monumental stimulus program, known as quantitative easing.

To stimulate growth, the central bank has been pumping money into the economy by buying $85 billion in bonds each month as a way to push down interest rates.

The Fed’s easy-money policies have made borrowing cheaper for consumers, home buyers and businesses.

However, it has also nudged investors into riskier investments such as stocks. Low interest rates have made bonds and savings accounts less attractive.

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