Financial Markets : STOCKS : Dow Rises 16.44 as Investors Cheer Job News
The stock market posted a moderate gain Friday after a government report on January employment boosted investor confidence about the economy and eased recession fears.
The Dow Jones index of 30 industrials rose 16.44 points to close at 2,602.70.
Advancing issues outnumbered decliners in nationwide trading of New York Stock Exchange-listed stocks, with 1,004 issues up, 495 down and 473 unchanged.
Big Board volume came to 164.40 million shares, up from 154.58 million in the previous session.
The Labor Department reported that the nation’s unemployment rate held steady at 5.3% last month while 275,000 new non-farm payroll jobs were created. The number of new jobs was substantially higher than market expectations of about 160,000 jobs, analysts said.
“Stock investors took the attitude that employment is better than expected, which means business is better than expected and the economy is not in a recession,” said Jack Solomon, equities analyst for Bear, Stearns & Co.
Traders said renewed merger activity also helped to revive takeover stocks. In particular, drug and biotechnology stocks got a boost from news that Roche Holdings would acquire a majority stake in Genentech Corp.
Despite the rally, the market retraced some of its gains late in the day as investors remained cautious ahead of next week’s $30-billion Treasury refunding, which could provide a better clue about the prospects for interest rates.
Prices on the Tokyo Stock Exchange closed broadly higher in thin trading, boosted by program buying. The Nikkei 225-share index, which gained a modest 17.47 points Thursday, soared 443.73 points to 37,650.15.
British shares edged higher, helped by early strength on Wall Street. By the close the Financial Times 100-share index was 9.3 points up at 2,355.1.
CREDIT Economy’s Strength Weakens Bonds Bond prices tumbled after the government released the January employment report suggesting that the economy is stronger than expected, diminishing chances for lower interest rates.
The Treasury’s benchmark 30-year bond lost 3/4 point, or $7.50 for every $1,000 in face value. Its yield, which rises when the price declines, jumped to 8.50% from 8.43% late Thursday.
The federal funds rate, the interest rate banks charge each other on overnight loans, was quoted at 8.25%, unchanged from late Thursday.
CREDIT Dollar, Gold Rise in Quiet Trading The dollar finished mostly higher in light, uneventful trading on world currency markets.
Gold prices rose, with gains more pronounced in overseas dealings. On New York’s Commodity Exchange, an ounce of gold gained 20 cents to close at $418.20. Republic National Bank later quoted a bid of $418.50 an ounce, up 85 cents from late Thursday.
The dollar rose following the better-than-expected employment report.
Most of the day’s activity centered on the dollar and the West German mark, both of which moved in a wide range.
COMMODITIES Summer Demand Fuels Oil Prices Expectations of strong gasoline demand early this summer fueled a strong rally in oil futures on the New York Mercantile Exchange.
On other commodity markets, copper and precious metals rose; livestock and meat were mixed; and grains and soybeans were mixed.
Gasoline futures posted the sharpest gains, settling 0.83 cent to 1.9 cents higher, with the contract for delivery in March at 64.22 cents a gallon; West Texas Intermediate crude oil finished 0.32 to 0.44 cent higher, with March at 23.02 cents gallon; heating oil was 0.77 cent to 1.52 cents higher, with March at 58.26 cents a gallon.
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