US STOCKS-Wall St rallies on hopes of U.S. rate cut, trade progress

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* Weak U.S. employment report casts pall over economy
* Traders boost bets on Fed rate cuts
* U.S. gives Chinese exporters more time before higher
tariffs
* Indexes up: Dow 1.01%, S&P 500 1.05%, Nasdaq 1.66%

(Updates prices to close, adds commentary)
By Sinéad Carew
New York June 7 (Reuters) - Wall Street's major indexes
charged higher on Friday, as sharply slowing U.S. job growth
boosted hopes for Federal Reserve interest rate cuts while
optimism about potential progress in U.S. trade fights with
China and Mexico added to risk appetites.
Investors bet that labor market weakness would give the Fed
a reason to provide the economy with more support, pushing the
S&P 500 and the Dow to their biggest weekly gains since the end
of November, right before a massive year-end sell-off.
A Labor Department report showed nonfarm payrolls increased
by 75,000 jobs last month, much smaller than the 185,000
additions estimated by economists in a Reuters poll, suggesting
the loss of momentum in economic activity was spreading to the
labor market. As a result traders raised bets for a rate cut in July
followed by two more rate cuts by year-end. MMT/
"The jobs report indicates there's some weakness but the
economy does remain relatively robust at this point," said Peter
Jankovskis, co-chief investment officer at OakBrook Investments
LLC in Lisle, Illinois.
Investors are putting weak jobs "in the context that it
might result in a more timely Fed action which would be more
supportive than if they wait too long," he said.
But others noted that investors appeared to give more weight
to Fed policy than economic data.
"Right now the market is willing to accept disappointing
growth in exchange for the prospect of lower rates," said Jack
Ablin, chief investment officer at Cresset Capital Management
in Chicago. "We're addicted to low rates and we're willing to
forsake our economic growth in exchange for those low rates."
The Dow Jones Industrial Average .DJI rose 263.28 points,
or 1.02%, to 25,983.94, the S&P 500 .SPX gained 29.85 points,
or 1.05%, to 2,873.34 and the Nasdaq Composite .IXIC added
126.55 points, or 1.66%, to 7,742.10.
Also adding to investor enthusiasm on Friday was a notice
from U.S. officials granting Chinese exporters two more weeks to
get their products to the United States before raising tariffs
on those items. U.S. and Chinese leaders are expected to meet
late in June at the G20 meeting. But while U.S. President Donald Trump said there was a "good
chance" of a US-Mexico trade deal, if the two countries failed
to make an agreement he plans to impose a 5% tariff on Mexican
imports on Monday. Mexican sources told Reuters late Friday that negotiators
are battling to reach agreement over a U.S. demand that Mexico
accept more asylum seekers. "An interest rate cut is being priced into the market, but
in order to go higher you do need to get progress on the trade
front because in the longer term that is the bigger issue for
markets," said Larry Adam, chief investment officer at Raymond
James in Baltimore, Maryland.
The S&P's biggest boosts on the day were Microsoft Corp
MSFT.O , Apple Inc AAPL.O and Amazon.com AMZN.O .
Technology stocks .SPLRCT , among the hardest hit due to
the recent escalation in trade tensions, rose 2% and provided
the biggest boost of the S&P 500's 11 major sectors. Chipmakers,
which get a major portion of their revenue from China, also
gained, with the Philadelphia chip index .SOX rising 1.2%.
However, tariff-sensitive industrials .SPLRCI
underperformed slightly with a 0.9% gain.
Interest-rate sensitive bank stocks .SPXBK dropped 0.98%.
The only major S&P sectors in the red were the broader financial
index .SPSY , down 0.19%, and a defensive favorite, utilities
.SPLRCU , which fell 0.77%.
"If people are thinking the Fed action is going to support
the economy you don't have the safe haven mission for utilities
coming into play," said Oakbrook's Jankovskis.
Beyond Meat Inc BYND.O shares closed up 39.4% at $138.65
after the maker of plant-based burgers said it expects to more
than double its revenue and report breakeven EBITDA this year.
It went public at $25 on May 2. Advancing issues outnumbered declining ones on the NYSE by a
3.10-to-1 ratio; on Nasdaq, a 1.93-to-1 ratio favored advancers.
The S&P 500 posted 116 new 52-week highs and no new lows;
the Nasdaq Composite recorded 100 new highs and 99 new lows.
On U.S. exchanges 6.48 billion shares changed hands compared
with the 7.04 billion average for the last 20 sessions.