* 287,000 jobs added in June; unemployment rises 4.9 pct
* Bank stocks lead S&P 500
* Indexes up: Dow 0.69 pct, S&P 0.68 pct, Nasdaq 0.66 pct (Updates to open)
By Yashaswini Swamynathan
July 8 (Reuters) - Wall Street was higher on Friday after data showed that the U.S. economy posted its largest job gains in eight months in June, strongly rebounding from dismal numbers in May.
The economy added 287,000 jobs in the public and private sectors in June, compared with the 175,000 expected by economists. The payroll count for May was revised down to 11,000 from the previously reported 38,000.
The robust data confirms the sentiment that the May report was an aberration and not indicative of weakness in the labor market.
Unemployment in June rose to 4.9 percent, compared with the estimate of 4.8 percent. A reading below 5 percent indicates full employment.
“It looks like the markets are heaving a big sigh of relief here in that it wasn’t a continued weakness that would concern the market of a broader economic slowdown,” said Michael Arone, chief investment strategist, State Street Global Advisors in Boston.
The data, collected a week before Britain voted on its European Union membership, will feed into the U.S. Federal Reserve’s plans on rate hikes but traders do not expect the central bank to move anytime soon.
Financial stocks soared following the data. JPMorgan , Wells Fargo and Bank of America rose more than 1 percent, and were the top influences on the S&P 500.
“In our opinion the Fed is on hold for all of 2016. This affirms the economy is still on decent footing but it doesn’t change the Fed’s path,” said Darrell Cronk, chief investment officer at Wells Fargo Wealth And Investment Management in New York.
The Fed next meets on July 26-27. Traders are pricing in a mere 22.8 percent chance of a rate hike in December, according to CME Group’s FedWatch tool.
At 9:39 a.m. EDT, the Dow Jones industrial average was up 123.1 points, or 0.69 percent, at 18,018.98, the S&P 500 was up 14.36 points, or 0.68 percent, at 2,112.26 and the Nasdaq Composite was up 32.04 points, or 0.66 percent, at 4,908.85.
Eight of the 10 major S&P indexes were higher, led by a 1.44 percent rise in the financials sector.
Crude prices bounced back from two-month lows hit in the previous session, but benchmark Brent was set for its largest weekly decline since January as bearish economic indicators weighed on oil.
Polycom’s shares were up 13 percent after the company agreed to be bought by a private equity firm for $1.7 billion, ending a takeover deal with Mitel. Mitel jumped 19 percent.
Gun makers Smith & Wesson and Sturm Ruger rose about 3 percent on expectations of higher gun sales due to fears of potential gun control policies following the worst mass shooting of police in U.S. history. Shares of wearable video camera makers Taser and Digital Ally surged on the news.
Juno dropped 27.4 percent to $29.75 after the drug developer’s cancer study was halted following the death of three patients.
Advancing issues outnumbered decliners on the NYSE by 2,320 to 384. On the Nasdaq, 1,820 issues rose and 467 fell.
The S&P 500 index showed 35 new 52-week highs and one new low, while the Nasdaq recorded 49 new highs and 7 new lows. (Reporting by Yashaswini Swamynathan in Bengaluru; Editing by Savio D‘Souza and Saumyadeb Chakrabarty)