U.S. stocks rose on Friday as results of bank stress tests fueled hopes that the worst is over for the financial sector, and news of fewer-than-expected April job cuts suggested the economic slump is moderating.
Shares of several major banks rose, with No. 2 U.S. bank JPMorgan Chase Inc
The rise in energy shares provided the market's other major boost as oil prices surged past $58 a barrel.
The release of the stress test results has given people a little bit of confidence that the government can help to solve this part of the financial crisis, said Richard Sparks, senior equities analyst and options trader at Schaeffer's Investment Research in Cincinnati.
There's a sense that the government actually has a logical plan, (that they) are holding the companies to a certain standard (so) even if things got worse, these companies will be able to survive. That helps bolster confidence in the administration.
The Dow Jones industrial average <.DJI> gained 142.02 points, or 1.69 percent, to 8,551.87. The Standard & Poor's 500 Index <.SPX> rose 18.89 points, or 2.08 percent, to 926.28. The Nasdaq Composite Index <.IXIC> climbed 19.98 points, or 1.16 percent, to 1,736.22.
Shares of Wells Fargo
Several of the large banks have announced equity and debt offerings in an attempt to raise capital following the stress tests. Stocks hit session highs following news that AT&T
The 539,000 jobs cut by employers in April was the smallest reduction since October, and hinted at some improvement in the labor market, but the unemployment rate soared to 8.9 percent, the highest since September 1983.
(Reporting by Ellis Mnyandu; Editing by Jan Paschal)