New York - US stocks edged higher on Friday following a payroll report that suggested a sharp rebound in economic activity early in the second quarter.
Still, while the report provided an encouraging read on the labor market, investors said Wall Street's gains over the week made further advances unlikely.
US job growth increased at its fastest pace in more than two years in April and the unemployment rate dived to a 5-1/2 year low of 6.3 percent, the Labor Department said. The payrolls gain of 288,000 was the largest since January 2012 and beat Wall Street's expectations for an increase of just 210,000.
The unemployment rate tumbled 0.4 percentage point, touching its lowest level since September 2008. The Labor Department attributed the decline to a drop in the number of unemployed people reentering the labor market as well as a fall in new entrants into the labor force.
“The headline number handily beat expectations, which bodes well for the whole weather theme we saw throughout the first quarter,” said Adam Sarhan, chief executive of Sarhan Capital in New York.
“We'll move higher on this but we had a big move this week. We're at resistance right now, and it may take a little bit of time to break above that.”
The Dow Jones industrial average rose 30.96 points, or 0.19 percent, to 16,589.83, the S&P 500 gained 3.57 points, or 0.19 percent, to 1,887.25 and the Nasdaq Composite added 1.412 points, or 0.03 percent, to 4,128.863.
For the week, the Dow has gained 1.4 percent, while the S&P 500 and the Nasdaq are both up 1.3 percent.
In company news, U.S. drugmaker Pfizer Inc 's sweetened 63 billion pound ($106 billion) bid for AstraZeneca Plc was promptly rejected by the British company Friday. Pfizer shares were down 1 percent at $30.84.
LinkedIn Corp shares slipped 4.7 percent to $153.68, a day after the social networking company forecast 2014 revenue below Wall Street's expectations, underscoring concerns about its ability to sustain its rapid growth.
Shares of Ares Management LP, the first U.S. private equity firm to go public in about two years, fell to a low of $18 in early trading on the New York Stock Exchange after being priced at $19, well below the expected range of $21-23, in a turbulent IPO market. They were last trading at $18.39.
German drugmaker Bayer AG is nearing an agreement to buy Merck & Co Inc's consumer healthcare unit, people familiar with the matter said, in a deal that could value the business at around $14 billion. Merck shares lost 1.2 percent to $58.93.