Wow, what a jolt the market received today with the Dow climbing an astounding 370 points.  The reason:  a jubilant U.S. jobs report that overshot the already highly optimistic forecast by a whopping 46,000 jobs.  With 200,000 new jobs expected, the actual number was 211,000 with an additional 35,000 coming from revisions to prior months.  The problem with this market, of course, has been that good news is often taken as bad (yikes, this might mean a rate hike) and bad news as good (whew, maybe no hike after all.)  It seems now that investors have accepted the inevitability of the first hike in 10 years coming very likely in another 12 days and so the jubilation now is on strong data, which was certainly delivered today.  Since the financial sector naturally benefits from the prospect of rising interest rates, companies like JP Morgan Chase led today's huge rally.  But none of this changes the fact that all eyes remain strongly focused on what will happen at the December 15th Fed meeting.  Volume was quite active at 7.7 billion.

Markets | Fri Dec 4, 2015 6:23pm EST

Wall St. gains 2 percent; U.S. jobs data underscores economic strength

BY CAROLINE VALETKEVITCH

DJ:  17,847.63  +369.96      NAS:  5,142.27  +104.74         S&P:  2,091.69  +42.07

(Reuters)  U.S. stocks rallied on Friday, giving the S&P 500 its biggest gain since early September, as U.S. jobs data suggested the economy was strong enough to sustain a Federal Reserve rate hike this month.

Financials, which benefit from higher borrowing costs, led the rally. The S&P financial index .SPSY jumped 2.7 percent.

JPMorgan Chase (JPM.N) rose 3.2 percent to $67.89 after European antitrust regulators dropped charges against the bank on blocking exchanges from derivatives markets.

But the rally, which followed two days of sharp losses, included most sectors and allowed the three major indexes to post slight gains for the week.

"Stocks are going to have to shift to a domestic economic performance focus…. We're going to see the market focused on what the U.S. economy is doing, rather than Fed policy," said Brad McMillan, chief investment officer at Commonwealth Financial Network in Waltham, Massachusetts.

"I think we see a continued upward trend for the rest of the year."

Nonfarm payrolls increased 211,000 in November, the U.S. Labor Department said, while September and October data were revised to show 35,000 more jobs than previously reported.

Analysts said the report, which also showed the unemployment rate held steady at 5 percent, most likely paves the way for the Fed to raise rates this month for the first time in nearly a decade.

The Dow Jones industrial average .DJI rose 369.96 points, or 2.12 percent, to 17,847.63, the S&P 500 .SPX gained 42.07 points, or 2.05 percent, to 2,091.69 and the Nasdaq Composite.IXIC added 104.74 points, or 2.08 percent, to 5,142.27.

For the week, the Dow and Nasdaq were up 0.3 percent, while the S&P 500 was up 0.1 percent.

Nine of the 10 major S&P 500 sectors ended up. The energy index .SPNY dipped 0.5 percent as oil prices fell on news that OPEC was planning to maintain its production near record highs despite depressed prices.

The closely watched employment report came a day after Fed Chair Janet Yellen struck an upbeat note on the economy when she testified before lawmakers, describing how it had largely met the criteria for a rate hike. The Fed's policy-setting committee will meet on Dec. 15-16.

Avon Products (AVP.N) rose 5.8 percent to $4.22 after a private equity investor group led by Barington Capital proposed a restructuring of the cosmetics maker.

Advancing issues outnumbered declining ones on the NYSE by 1,999 to 1,045, for a 1.91-to-1 ratio on the upside; on the Nasdaq, 1,840 issues rose and 965 fell for a 1.91-to-1 ratio favoring advancers.

The S&P 500 posted 22 new 52-week highs and 20 new lows; the Nasdaq recorded 69 new highs and 101 new lows.

About 7.7 billion shares changed hands on U.S. exchanges, compared with the 6.9 billion daily average for the past 20 trading days, according to Thomson Reuters data.