The S&P 500 Index gapped higher on Friday and extended gains in the morning trade session as investors continue to cheer the U.S. employment situation report.

The S&P 500 Index is up 0.96 percent, or 10.83 points, to trade at 1,133.80 at 12:32 pm.  The Dow Jones Industrial Average is up 0.80 percent, or 83.44 points, to trade at 10,527.58. 

Basic materials and the tech sectors are leading the rally. The American Depository Receipts (ADRs) of Rio Tinto (NYSE:RTP) are up 3.21 percent and Apple (NASDAQ:AAPL) is trading up 3.64 percent.

The Bureau of Labor Statistics (BLS) reported at 8:30 am EST that unemployment dropped to 9.7 percent and non-farm payroll declined by 36,000 in February.  Both figures beat expectations, according to surveys conducted by Bloomberg. 

Price Action

On Monday, the S&P 500 Index gained 11.22 points, or 1.02 percent, on a flurry of mergers and acquisition deals and an upbeat report on January global semiconductor sales.

The index gapped up on Tuesday and then traded range-bound for the next two sessions as investors eyed Friday's unemployment report.

On Tuesday, Wednesday, and Thursday, the S&P 500 found significant support at 1,117.  In each trading session, the index approached that level but never dipped significantly below it.   

The high of the range was at 1,125, achieved during intra-day trading on Wednesday.

Before the BLS's Friday unemployment report, the ADP released a non-farm private payroll report in line with expectations on Wednesday and the Department of Labor released its unemployment claims report, also in line with expectations, on Thursday.

However, the S&P 500 stayed range bound as market participants warily eyed the BLS's unemployment report. 

Distorted Statistics

Some were spooked by Larry Summers, a top Obama advisor, who stated that one should look past whatever the next figures are [for unemployment] to gauge the underlying trends, fearing that the results will be disappointing.

He asserted that the blizzards that affected much of the country during the last month are likely to distort the statistics.

Summers made the comments Monday on CNBC.

The BLS report on Friday stated that it was impossible to quantify the effect of the weather on its reported statistics.

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