Econ Data Send Yields Higher--And Stocks, Too

A seemingly strong April employment report pushed bond yields modestly higher on Friday, but not enough to hurt stocks, which rallied for the first time in four days.

The Dow Jones industrial average gained 78.47 points, or 0.9%, to 9,055.15, capping an otherwise down week on Wall Street. The Dow lost 1% for the week.

Winners topped losers by 18 to 11 on the New York Stock Exchange on Friday in relatively subdued trading activity.

Bond investors, increasingly fearful that the Federal Reserve Board is poised to tighten credit to slow the economy, were surprisingly calm in the face of the employment report.

The government said the nation’s unemployment rate fell to the lowest level in 28 years. (Stories, A1)

The yield on the bellwether 30-year Treasury bond edged up to 5.98% from 5.95% on Thursday. The yield was 5.93% a week ago. It remains below its recent high of 6.07% on April 29.

Analysts said yields didn’t rise significantly on Friday because many bond investors believe the Fed will leave interest rates alone in the near-term, despite the economy’s apparent strength.

Analysts noted that, despite the drop in the unemployment rate, other aspects of the April report suggested the economy is in fact slowing. For example, the average workweek for manufacturing workers fell to 40.7 hours in April. It has been declining since December, when it was 42.2 hours.

“That hints that the trade sector is deteriorating and is beginning to drag down manufacturing,” said James Glassman, economist at Chase Securities in New York.

Given prospects for slower growth--and tame interest rates--many analysts say the stock market has little to fear, this week’s profit-taking notwithstanding.

“This is still a bull market, but it’s a bull market that has rallied 22% from its January low to its recent high,” said Alfred E. Goldman, analysis at A.G. Edwards & Sons of St. Louis. “The best of athletes and the best of bulls have to rest from time to time.”

Among Friday’s highlights:

* The tech sector sprang to life, pushing the Nasdaq composite index up 29.23 points, or 1.6%, to 1,864.37. More people working in the economy could help computer sales, analysts noted.

Leading tech gainers included Microsoft, up $2.38 to $85.75; Intel, up $3.06 to $84.06; IBM, up $2.88 to $120; and Dell, up $5.13 to $91.75.

For the week the Nasdaq index fell 0.5%.

* Many biotech stocks surged, in part reflecting new publicity for the group this week on hype over anti-cancer drugs.

Amgen rose $1.88 to $59.13 on Friday, Cephalon jumped $2 to $14.56, Imclone Systems gained $1.69 to $13.25 and Advanced Tissue Sciences surged $2.06 to $10.94. BusinessWeek magazine said the federal government will approve Advanced Tissue’s engineered skin product in coming weeks.

* Other strong groups included drugs, banks, brokerages, foods and railroads.

Market Roundup, D4