Stocks gained Friday as underlying sentiment remained bullish after a somewhat positive employment report pointed to an ongoing solid business environment. The Dow Jones industrial average rose 0.5 percent, the S&P 500 gained 0.7 percent, and the Nasdaq rose 1.0 percent. US Treasury yields, the dollar rose and oil prices all advanced.

The market mood appears upbeat with a strong start to the new year and investors appear inclined to see news in favorable light. News of a nearly-as-expected 50K rise in payrolls in December and an unexpected downtick in unemployment to 4.4 percent from 4.5 percent in November suggested the economy is not tanking as some feared. It is not seen as strong enough to keep the Federal Reserve from keeping rates where they are for now and perhaps cutting them later in the year, as hoped.

Among sectors, chipmakers bounced back from Thursday's weakness to power the highly-weighted technology sector. Homebuilders rallied to lead consumer discretionary after President Trump called for US agencies to act to cut mortgage rates to boost housing demand.

Market Reflections track market reaction to the trading day's major events. Economic data, policymaker speeches, and company news are featured in this report as well as key indexes and financial instruments.

Understanding why markets respond as they do is fundamental for an investor. Market Reflections help explain how the day's events, news, and data impact the outlook for the economy and for market prices.