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Stocks Higher After Jobs Data

Kevin O'Shaughnessy

U.S. Market
Stocks were up at midday following better-than-expected employment numbers for May.

The Bureau of Labor Statistics reported nonfarm payrolls increased last month by 217,000, seasonally adjusted, beating economists' forecasts of 210,00. Additionally, the number of total U.S. payrolls rose to 138.5 million, higher than the precrisis peak employment level in 2008. The unemployment rate remained unchanged compared with April at 6.3%, though economists had expected a slight uptick to 6.4%. The April jobs number had a slight downward revision, and the labor-force participation rate was the same as in April at 62.8%.

Despite the upbeat jobs numbers offering positive signals for future economic growth, economists point to the lower participation rate as an inhibition to that growth.

Although stocks were up, Treasuries also increased as bond investors stayed heavily focused on yesterday's interest-rate cut in the eurozone.

The Dow and the S&P 500 were up 0.4% at midday, and the Nasdaq was 0.5% higher.

Stocks on the Move
Corporate news flow was slow Friday, though Bank of America (BAC) reportedly is in discussions with the U.S. Justice Department to pay $12 billion in civil-claim settlements, stemming from poor handling of mortgages before the financial crisis. Nearly half of the settlement would go toward homeowner relief. Despite the possible penalties against the bank, B of A's shares were up more than 1% at midday.

Foreign Markets
Asian stocks finished mostly lower. The Shanghai Composite and the Hang Seng were down 0.5% and 0.7%. The Nikkei 225 was flat.

Stocks in Europe finished higher. The FTSE 100 and the Paris CAC each rose 0.7%, while the DAX was 0.4% higher.