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U.S. stocks finished the week on a positive note, helped by a favorable Employment Situation Report for November.

Both the S&P 500 and the Dow settled at new all-time highs, adding 0.6% and 0.5%, respectively. The Nasdaq finished slightly behind its peers, adding 0.4%, while the small-cap Russell 2000 showed relative weakness, finishing with a gain of just 0.1%. For the week, the S&P 500 advanced 0.4%.

The Employment Situation Report for November showed strong job growth and subdued wage growth, keeping in line with recent trends. Nonfarm payrolls increased more than expected (228K actual vs 190K consensus), average hourly earnings rose less than expected (+0.2% actual vs +0.3% consensus), and the unemployment rate stayed at 4.1%.

In short, the report isn't likely to keep the Fed from raising rates at next week's meeting, but it could give the Fed a cause for pause going into 2018. 

A positive vibe from overseas equity markets also contributed to the upbeat sentiment on Wall Street. Stocks in the Asia-Pacific region finished Friday broadly higher as investors rallied around China's better-than-expected November trade surplus (+$40.21 billion actual vs +$35.00 billion expected). Japan's Nikkei added 1.4%, finishing flat for the week.

Elsewhere, the Euro Stoxx 50 settled with a gain of 0.6% after the UK and the European Union reached an agreement on Brexit divorce terms. Britain will pay as much as GBP39 billion to complete the separation and there will be no hard border between Ireland and Northern Ireland. Talks will now turn to future trade relations.

In addition, Congress' decision to pass a two-week stopgap spending bill, which delayed an impending government shutdown, helped underpin Friday's advance.

The S&P 500's telecom services sector (+1.5%) was the top-performing group, followed from a distance by the heavily-weighted health care space (+1.1%). Within the health care group, biotech names showed particular strength, sending the iShares Nasdaq Biotechnology ETF (IBB 106.07, +2.02) higher by 1.9%.

Alexion Pharmaceuticals (ALXN 114.46, +7.68) paced the biotech rally, jumping 7.2%, after the New York Times reported that activist hedge fund Elliot Management has urged the biotech company to do more to lift its stock price. Celgene (CELG 106.09, +3.36) also outperformed, adding 3.3%, after Atlantic Equities upgraded its shares to 'Overweight.'

In total, ten of eleven sectors finished Friday's session in positive territory, with the lightly-weighted materials space (unch) being the lone laggard. 

Outside the equity market, U.S. Treasuries finished mostly flat, with the benchmark 10-yr yield closing unchanged at 2.38%, while the U.S. Dollar Index ticked up 0.1% to 93.88. West Texas Intermediate crude futures jumped 1.1% to $57.30 per barrel, but still finished the week lower by 1.8%.

Reviewing Friday's economic data, which included the Employment Situation Report for November, the preliminary reading of the University of Michigan Consumer Sentiment Index for December, and October Wholesale Inventories:

• Employment Situation Report
  • November nonfarm payrolls increased by 228,000 while the consensus expected an increase of 190,000. The prior month's increase was revised to 244,000 from 261,000. Nonfarm private payrolls rose by 221,000 while the consensus expected an increase of 170,000. The previous month's increase was revised to 247,000 from 252,000.
  • The unemployment rate stayed at 4.1% (consensus 4.1%). Average hourly earnings increased by 0.2% (consensus +0.3%), while the previous month's reading was revised to -0.1% from 0.0%. The average workweek was reported at 34.5 (consensus 34.4). The previous month's reading was left unrevised at 34.4.
    • The key takeaway from the report is that wage growth remains subdued. That isn't likely to keep the Fed from raising rates at this month's meeting, yet it could give the Fed a data-based reason to move more slowly on the next rate hike in 2018.
• University of Michigan Consumer Sentiment:
  • The preliminary reading of the University of Michigan Consumer Sentiment Index for December declined to 96.8 (consensus 98.8) from 98.5 in November.
    • The key takeaway from the report is that consumers continue to remain upbeat about current economic conditions, with higher income expectations feeding their optimism. As an aside, there was also a jump in consumers' inflation expectations for 2018.
• Wholesale Inventories
  • October Wholesale Inventories decreased 0.5% (consensus -0.4%). The September reading was revised to +0.1% from +0.3%.
    • The key takeaway from the report is that the sales increase outpaced the inventory increase by a sizable margin, which is a step in the right direction for wholesalers trying to regain some pricing power.

On Monday, investors will receive just one economic report--the October Job Openings and Labor Turnover Survey--which will be released at 10:00 ET.

• Nasdaq Composite +27.1% YTD
• Dow Jones Industrial Average +23.1% YTD
• S&P 500 +18.4% YTD
• Russell 2000 +12.1% YTD