By Kristina Peterson
Investors pushed stocks up for the fourth day in a row, sailing
into the long weekend on a high note as an encouraging jobs report
sent stocks to their best pre-Labor Day week in two decades.
The Dow Jones Industrial Average (DJI) finished up 127.98
points, or 1.24%, to 10447.93, putting the Dow up 2.9% on the week
-- its first positive weekly showing since the beginning of August.
The Dow also edged back into positive territory for the year.
The market leaped after nonfarm payrolls data showed jobs
slowing at half the rate predicted by economists. The Labor
Department said the U.S. lost 54,000 jobs last month, about half of
what economists had expected and matching the level of revised
losses recorded the previous month.
The unemployment rate, calculated using a separate household
survey, edged up to 9.6%, as expected, from 9.5% for the previous
two months.
"In the last two weeks or so, things have been starting to firm
up, and today's jobs numbers really put an exclamation mark on
that," said Phil Orlando, equity strategist at Federated Investors.
"We're feeling a lot more comfortable about our view, than those
thinking about a double dip."
Orlando predicted that stocks would pick up after Labor Day, as
vacationing money managers return to an economy whose outlook has
improved.
"If you had a bearish bent in the middle of August when you went
on vacation, the story seems different today -- it seems
constructive," he said.
Not everyone was impressed. Bob Browne, chief investment officer
at Northern Trust Global Investments, said the addition of new
private-sector jobs is "not enough to absorb new entrants into the
work force let alone put the unemployed from the past few years
back to work," adding: "We have a long way to go."
But even slowing job losses was "enough to give us a catalyst on
a light day going into a long weekend," he said.
The Nasdaq Composite (RIXF) rose 1.53% to 2233.75, up 3.7% on
the week. The Standard & Poor's 500-stock index (SPX) tacked on
1.32% to 1104.47, putting its advance for the week at 3.7%.
Goldman Sachs Group (GS) rose 5.4% as financial stocks led the
day's and week's gains. Morgan Stanley (MS) gained 3.8%, J.P.
Morgan Chase (JPM) added 2.7% and Genworth Financial (GNW) advanced
6%.
Friday's jobs numbers followed recent reports on manufacturing
and housing that also came in above expectations, extending a
notable reversal from a long string of disappointing data that had
driven the Dow's biggest August drop since 2001.
Volume was light, with about 3.6 billion shares changing hands
in NYSE composite trading, short of 2010's daily average of about
five billion shares.
"The fear is really building towards a sharp movement upwards
rather than downwards," said Joe Greco, managing director for
Meridian Equity Partners. "Most of the bullets have been used from
the sell side, and any strong data is going to fuel the momentum
trade and short covering."
The strong start to the month comes as investors have been
encouraged that a double-dip recession may be avoided. But the
economic recovery still looks weak; data released Friday by the
Institute for Supply Management showed a slowing expansion in the
U.S. nonmanufacturing sector last month.
The U.S. Dollar Index (DXY), reflecting the U.S. currency
against a basket of six others, declined 0.5%. Treasurys slipped,
pushing the yield on the 10-year note (UST10Y) up to 2.71%.
Crude-oil futures dropped to $74.34 a barrel, while gold futures
also slipped.
On the deals front, Goldcorp (GG) slipped 2.3% after the gold
miner agreed to acquire all outstanding shares of Andean Resources
for $3.4 billion. Andean's principal asset is the Cerro Negro gold
project located in Argentina. .
Shares of Take-Two Interactive Software Inc. (TTWO) rallied 10%
after the company reported an unexpected quarterly profit and said
it expects a fiscal-year profit. .
Tax-preparation company H&R Block Inc. (HRB) climbed 5.8%
after reporting a smaller-than-expected loss from continuing
operations.
Campbell Soup Co. (CPB) slipped 2.4% after its fiscal
fourth-quarter earnings jumped 64% on prior-year write-downs, but
revenue at its soup business weakened.