Stocks Surge as Jobs Report Blunts Fears
Stock prices rose sharply Friday as traders were pleasantly surprised by the government’s report that inflation and the economy aren’t running rampant after all.
The monthly employment report helped temper investors’ concerns that the Federal Reserve might soon raise interest rates to slow the economy.
Bargain-hunting in the wake of the recent sell-off on Wall Street also contributed to the gains, as the Dow Jones industrial average rose 136.15 points to close at 10,799.84, adding to an 85-point gain on Thursday.
Broader stock indicators also rose. The tech-weighted Nasdaq composite index zipped 75.02 points to 2,478.34, its fifth-largest point gain ever. The Standard & Poor’s 500 rose 28.21 points to 1,327.75, while the Russell 2,000 index of smaller companies advanced 6.35 points to 442.33.
“Business is great. I’m feeling better about the market than I’ve felt in a while,” said Uri Landesman, a money manager at Aaron Fleck & Associates of Greenwich, Conn. “I’m finding things to buy. I wish I had more cash.”
Inflation jitters persisted, however, in the bond market despite the latest economic reports, pushing the yield to a one-year high. The benchmark 30-year Treasury yield rose to 5.96% from 5.94% the day before.
Friday brought the Nasdaq its strongest gain since April 21 as investors swooped in seeking bargains. Cisco Systems, up $6.06 to $114.88, and Yahoo, up $12.06 to $147.44, led the rally.
Advancing issues outnumbered decliners by an 8-5 ratio on the New York Stock Exchange.
For the week, the S&P; 500 gained 2%, the Nasdaq 0.3% and the Dow 2.2%.
Among Friday’s highlights:
* Walt Disney rallied $1.63 to $30.63 as the world’s second-largest media company may announce a major restructuring, including spinoffs of one or more of its operations, Dan Dorfman said in his JagNotes.com column.
* Circuit City Group climbed $6.75 to $81.88 as the consumer-electronics chain said quarterly per-share earnings will surge on demand for consumer electronics.
* Eli Lilly rose $3.31 to $75.25 as the maker of the top-selling antidepressant Prozac said it authorized a $500-million expansion of its stock buyback plan.
* Lucent Technologies gained $2.44 to $61.94 and Global Crossing rose $1.94 to $47.13 as the companies were awarded contracts valued at $350 million by Africa One Ltd., which is building an undersea fiber-optic cable network.
* High Speed Access gained $7.38 to $20.38 in the first day of trading for the provider of fast Internet connections over cable-TV lines.
Online investment bank Wit Capital Group surged $5.88 to $14.88 in its debut.
* PMC-Sierra climbed $7.38 to $55 as the maker of chips used in high-speed telecommunications networks was boosted by optimism that a product to be unveiled Monday will increase profit.
* Qualcomm rose $7.88 to $109.94 as the developer of cellular technology rallied for a second day on expectations that quarterly earnings may beat estimates.
* Michaels Stores climbed $2.31 to $30.75 as the arts-and-crafts retailer said it had first-quarter net income of 18 cents a share, beating the 15-cent average estimate of analysts surveyed by First Call.
Overseas, Japan’s Nikkei-225 stock average rose 0.5%, Germany’s DAX index gained 1.7% and Britain’s FT-SE 100 added 0.2%.
Market Roundup, C4
