* Mega-cap stocks jump; Financials fall
* U.S. job growth far below expectations in April
* Indexes up: Dow 0.47%, S&P 0.79%, Nasdaq 1.28%
(Adds comments, updates prices to early afternoon)
By Shreyashi Sanyal and Sruthi Shankar
May 7 (Reuters) - The S&P 500 and the Dow Jones Industrials
hit record highs on Friday, while the technology-heavy Nasdaq
index jumped 1% after weak U.S. jobs data eased worries about
the Federal Reserve reducing its massive stimulus program
anytime soon.
The Labor Department's closely watched employment report
showed U.S. employers hired far fewer workers than expected in
April, with nonfarm payrolls increasing by only 266,000 jobs
last month after rising by 770,000 in March. Economists polled by Reuters had forecast payrolls advancing
by nearly 1 million jobs. Data also showed unemployment rate
rose to 6.1% in April from 6.0% in March.
Highly valued stocks such as Microsoft Corp MSFT.O , Apple
Inc AAPL.O and Facebook Inc FB.O rose between 0.4% and 1.7%.
The MSCI's benchmark for global equity markets
.MIWD00000PUS also hit an all-time high, while European
equities .STOXX extended their record run. MKTS/GLOB .EU
"One number doesn't make a trend, but it takes some of the
heat off the economy overheating and inflation moving
dramatically higher," said Larry Adam, chief investment officer
at Raymond James.
"This puts less pressure on the Fed to prematurely talk
about tapering."
The jobs report alleviated concerns about rising inflation
and potentially higher U.S. interest rates which would weigh on
the valuations of growth companies.
Ten of the 11 major S&P 500 sectors were higher in early
afternoon trading, with a 1.3% rise in technology stocks
.SPLRCT leading the advance.
Financials .SPSY dropped 0.1%, with interest
rate-sensitive shares of lenders Bank of America BAC.N ,
JPMorgan Chase & Co JPM.N and Citigroup Inc C.N trading
lower. The S&P 500 banks sector .SPXBK fell 0.4%.
"If this is a one-off jobs report, if the economy is
recovering as strongly as we anticipate, that is something that
could drive yields higher and favor other value names and
reopening plays at the expense of tech stocks," said Matt
Weller, global head of market research at Forex.com.
At 12:02 p.m. ET, the Dow Jones Industrial Average .DJI
was up 161.58 points, or 0.47%, at 34,710.11, the S&P 500 .SPX
was up 33.13 points, or 0.79%, at 4,234.75 and the Nasdaq
Composite .IXIC was up 174.79 points, or 1.28%, at 13,807.64.
The Nasdaq is set to fall 1.1% this week, its worst weekly
decline since early March. The S&P 500 is tracking gains, while
the Dow is set to mark its best weekly performance in nearly one
month.
Payments firm Square Inc SQ.N rose 6.3% after reporting a
better-than-expected quarterly profit, as surging demand for
bitcoin fueled a jump in cryptocurrency transactions on its
application. Streaming device maker Roku Inc ROKU.O jumped 11.5%
following upbeat revenue outlook, while fitness equipment maker
Peloton Interactive PTON.O gained 6.1% as it laid out steps to
improve the safety of the equipment. Advancing issues outnumbered decliners by a 2.79-to-1 ratio
on the NYSE and by a 2.36-to-1 ratio on the Nasdaq.
The S&P index recorded 116 new 52-week highs and no new low,
while the Nasdaq recorded 114 new highs and 34 new lows.