(REUTERS) -- Stock index futures pointed to a sharply higher open on Friday after the government reported the U.S. economy created jobs at the fastest pace in nine months, infusing optimism into markets.
Nonfarm payrolls jumped by 243,000 in January, the Labor Department said, the most since April and far exceeding economists' expectations for a gain of 150,000. The unemployment rate dropped to a near three-year low of 8.3 percent.
All I can say is 'wow,' said Matt McCormick, a money manager at Cincinnati-based Bahl & Gaynor Inc. This is the kind of number people wouldn't have believed until we saw it.
S&P 500 futures jumped 12 points and were above fair value, a formula that evaluates pricing by taking into account interest rates, dividends and time to expiration on the contract. Dow Jones industrial average futures added 109 points, and Nasdaq 100 futures rose 23.25 points.
Recent data suggesting a slow but steady economic recovery have helped fuel a rally in stocks, with the S&P 500 up 5.4 percent so far this year and over 23 percent since lows in October. Many analysts had worried that a weak report could spark a pullback.
Aon Corp (AON.N) also reported a higher-than-expected profit that narrowly beat estimates. Shares edged 0.5 percent higher to $49.60.
Earnings this season have been mixed, with fewer companies beating expectations than in recent quarters. However many technology names, including Qualcomm Inc (QCOM.O) and Apple Inc (AAPL.O), have posted blowout quarters.
In other economic news, December factory orders are seen rising 1.5 percent, while the Institute for Supply Management's January non-manufacturing index is expected to come in at 53.0, a repeat of the revised December number. Both reports are due at 10 a.m. EST.
Investors largely took a wait-and-see approach on Thursday as U.S. stocks ended little changed ahead of the payrolls report.