U.S. stocks gain 1 percent led by tech gains; oil prices jump

NEW YORK (Reuters) - U.S. stocks jumped more than 1 percent on Friday, helped by Apple and other technology shares and by weaker-than-expected jobs data that eased interest rate worries, while U.S. oil prices hit their highest in more than three years.

Traders work on the floor of the New York Stock Exchange (NYSE) in New York, U.S., May 3, 2018. REUTERS/Brendan McDermid

Apple AAPL.O shares rose after Warren Buffett's Berkshire Hathaway BRKa.N raised its stake in the iPhone maker.

The U.S. Labor Department’s report showed non-farm payrolls increased by 164,000 jobs last month, while the unemployment rate fell to 3.9 percent. However, wages edged up only 0.1 percent, easing concerns that inflation pressures were increasing.

That assuaged some investor worries about a potential pick-up in the pace of U.S. interest rate hikes from the Federal Reserve.

“The report might have taken some time to digest,” said Shawn Cruz, manager of trader strategy at TD Ameritrade in Chicago. “The focus moved to the lack of wage inflation versus the drop in the unemployment rate. That’s what’s behind the rally today,” he said.

The U.S. central bank on Wednesday left rates unchanged and said it expected annual inflation to run close to its “symmetric” 2 percent target over the medium term.

The Dow Jones Industrial Average .DJI rose 332.36 points, or 1.39 percent, to 24,262.51, the S&P 500 .SPX gained 33.69 points, or 1.28 percent, to 2,663.42 and the Nasdaq Composite .IXIC added 121.47 points, or 1.71 percent, to 7,209.62.

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The pan-European FTSEurofirst 300 index .FTEU3 rose 0.66 percent and MSCI's gauge of stocks across the globe .MIWD00000PUS gained 0.75 percent.

U.S. crude oil prices rose to their highest in more than three years as global supplies remained tight and the market awaited news from Washington on possible new U.S. sanctions against Iran.

U.S. light crude CLc1 settled up $1.29 at $69.72 a barrel. It touched a session high of $69.97, its highest since November 2014. Brent crude oil LCOc1 settled up $1.25 at $74.87 a barrel. The global benchmark was set to end the week up 0.3 percent.

The U.S. dollar leaped to its highest levels this year against a basket of currencies despite disappointing U.S. employment data for April, before dropping back to trade little changed.

The dollar index .DXY rose 0.16 percent, with the euro EUR= down 0.21 percent to $1.1962.

The dollar has gained as investors bet that the Fed will continue raising rates while other central banks, including the European Central Bank, will act more slowly.

While the Fed is seen raising interest rates at least two more times this year, expectations of policy tightening from the ECB and the Bank of England are receding.

That has driven the difference between German and U.S. government bond yields to near the highest in nearly three decades, with the short-dated US2DE210=RR and long-dated US10DE10=RR "transatlantic spread" at 305 and 240 basis points respectively.

Gold prices rose slightly as the U.S. dollar backed off its highs. Spot gold XAU= rose 0.2 percent to $1,314.23 per ounce.

U.S. Treasury yields were little changed, supported by U.S. equities gains, after earlier dropping to multi-week lows.

In late afternoon trading, U.S. benchmark 10-year yields were flat at 2.945 percent US10YT=RR from 2.946 percent late on Thursday.

Additional reporting by Gertrude Chavez-Dreyfuss, April Joyner and Karen Brettell in New York and Ritvik Carvalho in London; Editing by Dan Grebler and Nick Zieminski