Brendan Mcdermid / REUTERS
Traders work on the floor of the New York Stock Exchange.
By NBC News wire services
Updated at 11:50 a.m. ET: Stocks were holding on to strong gains mid-session Friday as investors cheered key data on the labor market, which showed a solid increase in U.S. payrolls last month.
The Dow Jones industrial average was lately up over 200 points.
U.S. employers in July hired the most workers in five months, but an increase in the jobless rate to 8.3 percent will probably keep expectations of additional monetary stimulus from the Federal Reserve intact.
Nonfarm payrolls rose 163,000 last month, the Labor Department said on Friday, beating economists expectations for a 100,000 gain. The report was dimmed somewhat by the increase in the jobless rate from 8.2 percent in June, even as more people gave up the search for work.
In addition, employment for May and June was revised to show 6,000 fewer jobs created than previously reported.
The S&P 500 index has fallen more than 1.5 percent this week as investor hopes for further stimulus measures from central banks were dampened and a trading error at market maker Knight Capital Group Inc on Wednesday dealt another blow to confidence in market structure.
The S&P 500 decline comes after the benchmark index saw its best two-day run of the year to close out the prior week as European Central Bank President Mario Draghi heightened expectations for more immediate action to contain the euro zone debt crisis when he pledged to do "whatever it takes" to save the euro. But on Thursday, he dashed hopes for quick rescue measures.
?It's sort of a bounce back from yesterday's disappointing comments from Draghi,? said Cort Gwon, chief strategist at HudsonView Capital Management in New York.
Knight Capital shares slumped as the company fought for survival after a $440 million trading loss caused by a software glitch wiped out much of its capital. Securities regulators are looking into the events surrounding the trading glitch.
Dow component Procter & Gamble Co posted a drop in quarterly sales and said it would repurchase $4 billion worth of its shares this fiscal year.
LinkedIn Corp gained after the professional networking site reported higher-than-expected revenue and raised its full-year outlook as it pocketed more money from subscribers, services aimed at businesses and advertising.
NYSE Euronext said new strategies and cost cuts should help the trans-Atlantic exchange return to growth next year after losses in its three main business lines forced quarterly income down a fifth.
According to Thomson Reuters data though Thursday morning, of the 385 in the S&P 500 that have reported results, 67 percent have reported earnings above analyst expectations. Over the past four quarters, 68 percent of companies beat estimates.
European stocks rose, erasing most of the previous day's pullback and resuming a week-long rally as investors judged the European Central Bank remains committed to bold action to fight the debt crisis.
Asian shares fell as investors shunned risk after the European Central Bank took no immediate action and only hinted at future steps to tackle the euro zone's fiscal woes, following similar inaction from the Federal Reserve.
Reuters contributed to this report.
Steve Massocca, Wedbush Securities, discusses the better-than-expected jobs numbers and the surge in the markets.
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