Job News Lifts Stock Markets; Dollar Gains
Wall Street stocks rose Friday as investors shrugged off benign unemployment figures and applauded the market’s recovery over a major decline earlier in the week.
The dollar and bonds prices gained amid continuing weakness in Asia.
The Dow Jones industrial average gained 20.34 points to close at 8,598.02, down 285.27 for the week. The market lost nearly 3% Tuesday. However, Friday’s unemployment report and other economic figures gave investors some basis for support.
Speaking of the market’s resilience, Bill Meehan, chief market analyst at Cantor Fitzgerald, said, “It’s fairly positive, and a little bit more rational with people willing to look for what they perceive as value.”
Government data released early Friday showed job creation slowed in July and the unemployment rate held steady at 4.5% as a rock-solid U.S. economy weathered a major strike at General Motors.
Wall Street focused on a 3-cent gain in average hourly earnings to $12.79 in July, identical to the one in June, so it did not spark any worries about a pickup in wages that could drive inflation higher.
“The market is in a correctional phase, got oversold, and is having a little lift because of that,” Alfred Goldman, a market analyst at A.G. Edwards, said. “Unless we see several days of much-improved breadth, we will retest those lows.”
Breadth on the New York Stock Exchange was positive for the second straight session, lending some encouragement.
Advancing issues outpaced decliners by a 2-to-1 margin, with a brisk 759 million shares changing hands, noteworthy for a Friday in August.
The Nasdaq ended up 17.26 points at 1,846.77. It was the tech-heavy index’s second straight day of sharp gains, but it was still down 25.61 points for the week.
The NYSE composite index rose 1.70 points to 549.50. The Russell 2,000 index of smaller companies rose 9.18 points to 415.80.
Bond prices reaped solid gains as the dollar’s rise against the yen and the stock market’s modest gains overshadowed July’s increase in nonfarm payrolls.
The benchmark 30-year bond price rose, to push down its yield to 5.62% from 5.67% Thursday.
Among Friday’s highlights:
* Small- and mid-caps led the day. The Russell’s gains were led by little-known names such as PMC-Sierra, a maker of parts for computer networks, up $3.63 to $36.25. The S&P; 400 MidCap Index rose 5.85, or 1.8%, to 340.84, led by software stocks such as Network Associates, up $2.63 to $46.44, and oil-drilling stocks such as EVI Weatherford, up $2.31 to $25.81.
* Electronic Data Systems rose $5.31 to $42 after Chief Executive Les Alberthal resigned. Investors cheered the departure, adding almost $2 billion to the company’s market capitalization in about an hour. EDS missed earnings estimates in four of the last seven quarters as revenue from major customers slid.
* Semiconductor stocks gained for a third day on optimism that the drop in sales is almost over. Data from the Semiconductor Industry Assn. showed June sales rose a better-than-expected 22.3% from May.
AMD gained $1.44 to $18.19 and C-Cube rose $1.13 to $17.81. Intel fell 31 cents to $86.69 as large stocks declined.
At the New York Mercantile Exchange, crude oil for September delivery closed 4 cents higher at $13.80 a barrel, near the day’s low and down 41 cents on the week.
September gasoline ended 0.53 cent a gallon higher at 43.40 cents.
In currency trading, the dollar rose against the Japanese yen but pulled back from record highs against the Canadian dollar after aggressive market intervention by the Bank of Canada.
The dollar rose to 146.13 yen from 144.32 yen at Thursday’s close.
On overseas exchanges, London’s FTSE-100 closed up 1.54%. Tokyo’s 225-share Nikkei average closed down 0.30%. Hong Kong’s Hang Seng index was down 3.25%.
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Market Roundup, D4
