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Stocks rise on hiring jump

Stocks jumped Friday on news of steady growth in hiring last month. Expectation of continued economic stimulus from the Federal Reserve also pushed stocks upward. 

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The S&P 500 index is down 1.6 percent since reaching a record high on May 21. The next day, Fed Chairman Ben Bernanke said the Fed could ease up on its economic stimulus program in one of its next few meetings.

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In government bond trading, the yield on the 10-year Treasury note rose to 2.18 percent from 2.08 percent late Thursday as investors moved out of safer assets.

The Labor Department's monthly survey of employment is one of the most important gauges of the U.S. economy and receives close scrutiny from investors. It can frequently cause big moves in financial markets, especially if the report shows that employment is stronger or weaker than economists were expecting.

On May 3, the government reported not only a strong pickup in hiring in April but it also revised sharply upward its estimates for job growth in February and March. That sent the Dow Jones industrial average past 15,000 for the first time, while the S&P 500 index broke through 1,600.

In the weeks following that report, bond yields rose from 1.63 percent as high as 2.20 percent May 31. That meant investors thought the economy was strengthening, dampening the appeal of low-risk assets like bonds. It also meant investors believed the Fed would act sooner than previously thought to curtail its bond-buying program.

Investors are still keeping an eye on interest rates because of the impact that they have on the economy. For example, higher borrowing costs will push up mortgage rates and curb demand for housing. The recovery in the housing market has also boosted stock prices this year.

"Interest rates have really gone up in quite dramatically from a month ago," said Paul Hogan, the manager of the FAM Equity-Income Fund. "If they continue to rise, the market will be a little more bit choppy."

The improving economy has also helped support the dollar this year. The U.S. currency rose against the euro and the yen Friday.

The price of gold fell $32.80, or 2.3 percent, to $1,383 an ounce. Gold has fallen sharply this year as a rising stock market and a strengthening dollar have diminished its appeal as an alternative investment.

In other commodities trading, the price of oil rose $1.27, or 1.3 percent, to $96.03 a barrel.

Among other stocks making big moves:

Gap rose $1.11, or 2.7 percent, to $42.09. The San Francisco-based clothing store chain reported late Thursday that its sales jumped 7 percent in May, more than expected, helped by strong results at its namesake Gap and Old Navy stores.

TiVo plunged $2.61, or 19 percent, to $11.10 after the digital video recording company settled patent disputes with several technology companies including Cisco and Motorola Mobility but received far less than what most investors inspected. TiVo has posted annual losses in nearly all of the past 10 years.

— Thor Industries rose $4.92, or 11.9 percent, to $46.16 after the recreational vehicle maker reported a 6 percent increase in income. The results beat market expectations on stronger sales of RVs and a lower tax rate.

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