Stocks and high-yield bonds rallied in U.S. markets on Friday, after yet another round of positive economic data proved a boon to investors betting that the economy will improve at a faster rate than previously forecast.

A pre-market report by the federal Labor Department said companies hired 243,000 employees in January, beating estimates of analysts, who as a group had a median prediction of 140,000 new jobs. United States unemployment fell to 8.3 percent from 8.5 percent. A further report by the Institute for Supply Management, a non-profit trade group, said the service industry had grown at the fastest pace in 11 months.

Here's a look at how the markets reacted:

  • Stocks. The benchmark Dow Jones Industrial Average for U.S. equities closed up 156.82 points, an increase of 1.23 percent, to 12,862.23. The wider S&P 500 Index was up 19.36 points, or 1.46 percent, to 1,344.90. The rally was remarkably wide, with the Russell 2000 Index, which captures more than half of all U.S.-traded equities, up 2.24 percent. Consumer cyclicals and capital goods companies outperformed the wider market, as investors bet that the economy would be better than predicted.
  • Bonds. Investors dropped safe-haven investment in U.S. government debt to clear up cash for riskier securities, causing government bonds to fall in price across the board. The yield on the benchmark 10-year note, which moves opposite its price, jumped 12.4 basis points to 1.949 percent. Investors used some of the unlocked cash to buy higher-yield corporate bonds, driving down yields on the investment-grade debt of companies like Goldman Sachs Group, General Electric Capital Corp. and Walt Disney Co.
  • Commodities. Industrial commodities had a big day. Crude oil rose more than one percent and copper shot up 3.2 percent. Precious metals struggled, though. Gold surrendered all the gains it had gotten this week, falling more than 1.1 percent, and silver ended 1.3 percent lower.
  • Foreign Exchange. The U.S. dollar reversed early gains against the euro, which ended the day slightly higher than $1.31. The greenback, which also fell against the British pound sterling and the Canadian dollar, rose slightly on the Japanese yen. In Latin America, Brazil's real closed up against the U.S. dollar and Mexico's peso climbed to a 21-week high against the greenback.