By Avantika Chilkoti

U.S. stock futures extended gains Friday after the latest monthly jobs report eased some worries of an imminent slowdown in economic activity.

Futures tied to the S&P 500 rose 0.5% and had been up 0.2% ahead of the data.

Employers added 266,000 jobs in November and unemployment matched a 50-year low of 3.5%, signs the U.S. economy is withstanding a global slowdown.

Economists surveyed by The Wall Street Journal projected nonfarm payrolls increased by 187,000 and the unemployment rate remained at a historically low 3.6%.

Haven assets like gold and Treasurys slid, pushing the yield on the benchmark 10-year U.S. Treasury note up to 1.852% and sending most-active gold futures down 0.8%.

"It's a very solid jobs report," said Michael Arone, chief investment strategist at State Street Global Advisors. "Since August you have seen recession fears recede, and this report continues to show that the U.S. economy is on a firm footing."

Household spending has proved to be crucial this year for U.S. economic growth, though the Federal Reserve has also cut rates three times to help bolster output amid rising fears of a global slowdown.

"All that's keeping it together from the U.S. perspective at the moment is the consumer," said James Athey, investment analyst at Aberdeen Standard Investments. Weak employment figures would have had knock-on effects for confidence and spending, he said ahead of the report.

Markets are likely to have an asymmetrical reaction to the jobs report, Mr. Athey said. Better-than-expected jobs figures would be unlikely to alter expectations that the Fed will keep rates on hold for the foreseeable future, but disappointing data could turn sentiment on the strength of the economy, he said.

U.S.-China trade talks also remain in the spotlight for markets ahead of the Dec. 15 deadline for new tariffs on consumer goods to take effect. At the end of a week that has seen markets react to conflicting signals on the progress of negotiations, China's State Council on Friday began the process of exempting some soybeans and pork imported from the U.S. from punitive tariffs, the state-run Xinhua News Agency said.

"I don't think there will be anything signed by the 15th, but they may well kick it into next year," said Tom Roderick, a portfolio manager at London-based hedge fund Trium Capital, adding that "both sides are playing nice at the moment" with little incentive to escalate tariffs.

President Trump lauded the stock market's 2019 rally just before the jobs report, saying on Twitter, "Stock Markets Up Record Numbers. For this year alone, Dow up 18.65%, S&P up 24.36%, Nasdaq Composite up 29.17%. 'It's the economy, stupid.'"

Overseas, the Stoxx Europe 600 index gained 0.7%. and the Shanghai Composite Index closed up 0.4%. The Hong Kong and South Korean gauges rallied just over 1%.

Shares in French pharmaceuticals maker Ipsen dropped over 20% after the U.S. Food and Drug Administration put studies for one of its drug candidates on partial clinical hold for patients who are under the age of 14.

Swiss Re rose about 2.5% in Zurich after the reinsurance giant agreed to sell its ReAssure business to Phoenix Group Holdings in a cash-and-stock deal valued at GBP3.25 billion ($4.27 billion) deal.

Meanwhile, U.K. markets remained volatile ahead of a general election next week. The FTSE 250 index, which is dominated by companies that have significant domestic operations, rallied 0.4% on Friday as investors speculate that Prime Minister Boris Johnson's Conservative Party will come out on top in the vote, reducing the uncertainty around the U.K.'s withdrawal from the European Union.

"The way the polls look at the moment, it's not going to be a narrow majority open to hostage-taking," said Mr. Roderick.

The pound edged down 0.2% against the dollar and less than 0.1% on the euro.

Write to Avantika Chilkoti at Avantika.Chilkoti@wsj.com

(END) Dow Jones Newswires

December 06, 2019 08:56 ET (13:56 GMT)

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