* October payrolls well above expectations
* Disney up after profit beats estimates
* Santarus jumps on buyout deal, acquirer Salix also up
* Indexes up: Dow 0.6 pct, S&P 0.9 pct, Nasdaq 1.4 pct
By Rodrigo Campos
NEW YORK, Nov 8 U.S. stocks jumped on Friday,
bouncing back from a selloff in the previous session after an
unexpectedly strong payrolls report lent weight to views the
world's largest economy is stronger than previously thought.
Futures tumbled earlier after data showed 204,000 new jobs
were created last month, much more than the expected 125,000, as
it increased chances the Federal Reserve could begin to scale
back its stimulus before the end of the year.
Some market participants are, however, looking past the Fed
taper and focusing on what the prospect of a better economy will
mean for the equities market.
"The first part of the equation for the Fed to taper is data
showing the economy is getting better. If companies are doing
well and business is good, you don't need to have zero percent
short-term money in order for the stock market to do well," said
Eric Kuby, chief investment officer at North Star Investment
Management Corp in Chicago.
The strong data also sent U.S. Treasuries prices lower,
lifting the benchmark 10-year yield to its highest
in more than three weeks. A four-month rally in yields earlier
this year pressured stocks, but the recent strong data has eased
concerns over higher borrowing costs.
"Most people in the market believe in the next couple years
the 10-year yield will return to a 3-to-4 percent level, and a
market trading at 17 times earnings is cheap still, in that
environment," Kuby said.
The most recent trailing price-to-earnings ratio on the S&P
500 is 16.2 according to Thomson Reuters data, with the forward
P/E at 14.8.
The Dow Jones industrial average rose 87.14 points or
0.56 percent, to 15,681.12, the S&P 500 gained 15.8
points or 0.9 percent, to 1,762.95 and the Nasdaq Composite
added 53.685 points or 1.39 percent, to 3,911.017.
Friday's advance set the Dow and S&P on track to close their
fifth straight week of gains.
Financial stocks led the charge on the S&P 500 with
a 1.7 percent advance, following a more than 1 percent drop in
the sector on Thursday and on the expectation that higher rates
will translate into stronger earnings.
JPMorgan Chase added 3.6 percent to $53.52 while
Wells Fargo, Bank of America and Citigroup
were all up more than 2 percent.
On the other hand homebuilders, seen hurting if mortgage
rates rise sharply, saw their stocks fall. Shares of Lennar
, Ryland Group and Pulte Homes fell more
than 4 percent each.
Apparel retailer Gap's shares led percentage gains
on the S&P 500 with a 9 percent advance a day after it posted
October same-store sales that rose 4 percent, well ahead of the
analysts' average estimate of 0.1 percent.
Santarus Inc surged 37.8 percent to $32 after Salix
Pharmaceuticals Ltd agreed to buy the drugmaker for
about $2.6 billion. Salix shares jumped 18 percent to $84.14.
Disney shares rose 2.9 percent to $69.13 after its
profit jumped to beat Wall Street expectations, lifted by higher
visitor spending at U.S. theme parks, increased consumer product
sales and its summer animated movie hit "Monsters University."
Twitter shares fell 4.1 percent to $43.05 a day
after its NYSE debut. Shares had rallied 72.7 percent Thursday,
though they closed slightly below the opening print of $45.10.
Other economic data showed consumer spending rose 0.2
percent after advancing 0.3 percent in August, in line with
The Thomson Reuters/University of Michigan's preliminary
reading on consumer sentiment fell to 72.0 in November, its
lowest since December 2011 and below both October's final
reading of 73.2 and the 74.5 forecast.