NEW YORK -- Stocks rallied about 1% despite the U.S. Labor Department's report showing weaker-than-expected employment growth last month.
Investors appeared to look on the brighter side of the federal government's closely watched barometer of the labor market even though it fell far below estimates for the second consecutive month.
The federal government said Friday that the U.S. economy added a disappointing 113,000 net jobs last month. But that was still more than the 74,000 jobs gained in December.
“It wasn’t good,” Jerry Braakman, chief investment officer of First American Trust in Santa Ana, said of the report. “It was OK, but what it really showed is that it wasn’t free falling, that this wasn’t going to accelerate into a downward spiral, which is what people are really concerned about. There’s still a lot of fear that we’re going to see another 2008.”
Investors also took comfort in the labor report's more hopeful signs: growth in manufacturing jobs and an uptick in people looking for work.
The rally on Wall Street lifted major U.S. indexes into positive territory for the last five days. It was an optimistic end to a week that began with the worst day for the stock market so far this year.
The Dow Jones industrial average added 165.55 points, or 1.1%, to close at 15,794.08 on Friday.
The broader Standard & Poor's 500 index rose 23.59 points, or 1.3%, to 1,797.02. The technology-focused Nasdaq composite climbed 68.74 points, or 1.7%, to 4,125.86.
The Labor Department report, though lackluster, helped ease worries over a slowdown in the U.S. economic recovery.
Weak reports on manufacturing and auto sales released Monday sent investors fleeing stocks, adding to jitters over growth prospects in developing countries as the Federal Reserve scales back its massive stimulus. The Dow suffered its worst day of 2014, plummeting 326 points, or 2%, at the start of the week.
Still, the Dow is down about 5% for the year as of the market's close Friday. It's unclear whether stocks are in the midst of a correction -- typically defined as a decline of about 10% or more -- or the market has begun rebounding.
After the Dow's surprising 27% run-up in 2013, many on Wall Street have been expecting a steep pull-back.
“It’s either a reprieve, or it is the beginning of the market gaining momentum," Quincy Krosby, market strategist at Prudential Financial, said Friday.
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