* S&P 500 trades above 1,600, Dow briefly tops 15,000
* U.S. job market shows surprising strength
* Russell 2000 jumps, hits record
* Indexes up: Dow 1.1 pct, S&P 1.2 pct, Nasdaq 1.4 pct
By Rodrigo Campos
NEW YORK, May 3 (Reuters) - U.S. stocks rallied on Friday,
with the S&P 500 and Dow industrials hitting intraday records
after employment grew more than expected in April, easing
concerns about a weak economy.
The S&P 500 index broke above 1,600 and the Dow briefly
traded above 15,000 for the first time as stocks extended this
Confirming the broad strength of the market's advance, the
mid- and small cap Russell 2000 stock index rose 2
percent to a record.
Non-farm payrolls rose by 165,000 last month and the
unemployment rate fell to 7.5 percent, a four-year low, from 7.6
percent, the government said. In addition, hiring was much
stronger than previously thought in February and
Investors welcomed the gains after weeks of disappointing
data, including tepid manufacturing reports, that suggested the
economic recovery was losing steam.
"The payrolls number gives the OK for the risk-on trade and
this will be led by economically sensitive companies," said Dan
Veru, chief investment officer at Palisade Capital Management in
Fort Lee, New Jersey.
The Dow Jones industrial average rose 162.59 points
or 1.1 percent, to 14,994.17, the S&P 500 gained 19.32
points or 1.21 percent, to 1,616.91 and the Nasdaq Composite
added 46.22 points or 1.38 percent, to 3,386.84.
Basic materials and industrials led the S&P advance, with
the S&P materials index up 2 percent.
Palisade's Veru said the current earnings season has been
characterized by sluggish growth in revenues, so as organic
growth by companies becomes harder, large-cap firms "will choose
to buy growth."
"We would anticipate medium and small companies will see
robust merger and acquisition activity as a result of that,"
Of the 404 companies in the S&P 500 that have reported
earnings so far, 68.3 percent have beaten earnings expectations,
but only 46.3 percent have reported revenue above expectations.
Over the past four quarters, 67 percent of companies beat on
earnings and 52 percent beat revenue estimates.
The S&P and Dow were on track to end the week with a gain
shy of 2 percent, while the Nasdaq added 3.3 percent so far this
Mining stocks were among top gainers, including Freeport
McMoRan Copper & Gold Inc, up 3.4 percent at $31.36,
after prices of copper posted the biggest daily gain since late
General Electric, up 1.6 percent at $22.68, led gains
among industrials after it won approval to buy oilfield pump
maker Lufkin Industries for about $3 billion. The deal
will allow GE to sharply increase its presence in the market to
extract oil and natural gas from shale.
Gilead Sciences shares hit their highest price ever
and were last up 6.3 percent to $55.45 a day after the world's
largest maker of branded HIV drugs reported a big rise in
LinkedIn Corp shares fell 10 percent to $181.49 a
day after the social network reported disappointing revenue
In other economic reports on Friday, U.S. factory orders
fell sharply in March while the pace of growth in the vast U.S.
services sector eased in April to the slowest pace in nine