Stocks Soar on Signs U.S. Economy Is Improving

The Labor Department said Friday that nonfarm payrolls rose by 163,000 in July, better than the 100,000 expected by economists in a Reuters survey, as manufacturing jobs and temporary hiring continued to pick up.

This was the biggest monthly jobs gain since February.

The increase "will ease fears that the U.S. economy is following Europe into recession and, if this proves to be the start of a run of stronger data, could yet convince the Fed that it might not need to provide more monetary stimulus after all," said Paul Ashworth, chief U.S. economist at Capital Economics.

The June nonfarm payrolls number was downwardly revised to 64,000.

Average hourly earnings for all employees on private nonfarm payrolls edged up by 2 cents to $23.52.

The unemployment rate in July rose to 8.3% amid a fall in the employment measure found in the household survey of the employment situation report that is used to calculate the unemployment rate.

"The household survey measure of employment is much more volatile, however, and it isn't too surprising to see some payback after a 422,000 jump back in May," Ashworth noted.

Also on Friday, the Institute for Supply Management's July non-manufacturing index registered 52.6 in July, 0.5 point higher than June's 52.1. The July read was a touch higher than the expected 52. Eleven non-manufacturing industries reported growth in July.

September crude oil futures settled up $4.27 at $91.40 a barrel. December gold futures settled up $18.60 at $1,609.30 an ounce.

The benchmark 10-year Treasury was falling 27/32, raising the yield to 1.572%. The greenback was plunging 1.2%, according to the dollar index.

The FTSE in London settled ahead by 2.21% and the DAX in Germany finished higher by 3.93%.

U.S. stocks slid Thursday for a fourth straight session after European Central Bank President Mario Draghi said little about helping struggling nations a day after the Federal Reserve failed to deliver support to the U.S. economy.

A surprising decline in U.S. factory orders also put a damper on sentiment.

On the corporate front, Blue Nile(NILE) shares Friday skyrocketed 35% after the diamonds and jewelry retailer predicted third-quarter sales that beat Wall Street targets.