Markets Are In Rally Mode - Dow Up 130

Markets are in rally mode after the jobs report came in better than expected.

In morning trade, the Dow as up 145 points, the S&P 500 was up 17 points, and the Nasdaq was up 45 points.

Bonds were falling after the report, with the two-year yield spiking to almost 0.58% from 0.52% ahead of the report, while the 10-year fell to 2.48% from 2.44% and the 30-year rose to around 3.15% from 3.10%.

The biggest story on Friday is the latest jobs report, which showed nonfarm payrolls grew by 248,000 in September, better than the 215,000 that was expected by economists as the unemployment rate fell to 5.9% for the first time since July 2008.

Wages were a bit disappointing, growing just 2% year-over-year, as the labor force participation rate fell to 62.7%, the lowest level since 1978.

Also in economic data, the balance of trade report came in better than expected, as the trade deficit narrowed to $40.1 billion in August as the US oil deficit fell to its lowest level in ten years.

Markit's latest US services PMI fell to 58.6 in September from 59.6 in August. This was a four-month low for the index, but any reading over 50 indicates growth in the services sector.

Following the jobs report, the price of gold fell and was trading below $1,200 an ounce in morning trade. Yesterday, we highlighted comments from analysts at Ned Davis Research, who said that gold could fall as low a $660 as the "commodity supercycle" for the precious metal unwinds.

In contrast, the US dollar surged after the jobs report.