Stocks higher after payrolls report

Stocks are accelerating their gains after unemployment fell more than expected in May.

S&P 500 futures rose almost 0.2 percent, more than twice their gain before the report. Europe is broadly higher, led by gains of about 1 percent in the higher-risk countries of Spain and Italy. India's Sensex continued its blazing run overnight, gaining a 1.5 percent, while most other Asian markets were little-changed.

The S&P 500 blasted to new highs yesterday after the European Central Bank cut interest rates to record lows, but the real catalyst was money flooding back into the same Russell 2000 small-cap index that fell sharply in March and April. The Nasdaq 100 also broke out to levels last seen during the tech bubble of 2000.

The Labor Department reported that unemployment fell to 6.3 percent last month, lower than the 6.4 percent rate forecast by economists. Non-farm payrolls grew by 217,000, slightly below expectations for 220,000.The calendar now remains quiet through the following week.

In other economic news, Germany's exports posted their biggest gain in two years and the country's central bank hiked its 2014 economic-growth forecast. The World Bank also said that China will meet this year's 7.5 percent growth target.

Buying has been spread broadly across the market, with every major sector up recently. Financials have been the strongest area in the last week, breaking a long period of underperformance. Big-box retailers, mattress companies, and providers of clinical-testing services have also been coming back to life. Rental companies, newspaper publishers, energy frackers, and liquefied natural-gas companies have also remained strong, according to our researchLAB market scanner.

In company-specific news, Hertz is down 10 percent after announcing that it would restate results and that "financial statements for 2011 should no longer be relied upon." Diamond Foods reported a wider-than-expected loss yesterday afternoon and fell 9 percent in extended-hours trading. Comtech Telecommunications also rose on a strong quarter.

Commodities are mixed, with oil up 0.2 percent, while copper fell 1.8 percent and precious metals inched lower. Grains are up fractionally. Currencies are little-changed.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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