Moderate Jobs Report Boosts Stocks
Stocks surged Friday after a report on job growth spurred optimism that the economy was expanding at a pace that would boost corporate earnings without pushing up interest rates.
Treasury bonds also rallied, sending yields lower. But the dollar fell on the jobs data and worries that the Group of 7 major industrialized nations would do little to bolster the greenback.
Gold futures rebounded as the dollar dropped, but oil futures slipped as traders turned cautious before a meeting of the Organization of the Petroleum Exporting Countries next week.
The Labor Department reported that the unemployment rate fell 0.1% to 5.6% last month to its lowest level since October 2001. The economy added a net of 112,000 jobs in January, and though analysts and economists had been expecting a higher number, the report was enough to motivate stock buyers who had been dormant for more than two weeks.
“It’s a Goldilocks report -- not too hot and not too cold,” said Hugh Johnson, chief investment officer at brokerage First Albany Corp.
The Dow Jones industrial average climbed 97.48 points, or 0.9%, to finish at 10,593.03, ending the week up 1%.
Rising stocks outnumbered losers by about 4 to 1 on the New York Stock Exchange and by about 3 to 1 on Nasdaq, though trading volume declined from Thursday.
The technology-heavy Nasdaq composite index jumped 44.45 points, or 2.2%, to 2,064.01, but was off 0.1% for the week as a result of a 52-point loss Wednesday. It was Nasdaq’s third straight losing week.
The Standard & Poor’s 500 index rose 14.17 points, or 1.3%, to 1,142.76 and finished the week up 1%. It was the 10th gain for the S&P; in the last 11 weeks.
Among Friday’s highlights:
* Wireless equipment maker LM Ericsson helped to stoke the tech sector, soaring $3.07, or 13%, to $26.77 after posting a profit that exceeded expectations. Forecasts for growth in 2004 were slightly better than expected as well.
Other tech winners included National Semiconductor, up $1.67 to $39.12; Macromedia, up $1.33 to $19.56; and Ipayment, up $1.78 to $36.25.
* Watson Pharmaceuticals gained $1.87 to $47.87. It met Wall Street estimates with 23% quarterly profit growth and had its rating boosted from “neutral” to “overweight” by J.P. Morgan Chase & Co.
* McDonald’s posted a 19% increase in January sales despite the mad-cow disease discovery. Shares rose 46 cents to $27.16.
* On the downside, Electronic Data Systems fell $1.39 to $21.90 after swinging to a loss in the fourth quarter even though it managed to beat analysts’ expectations before one-time charges.
* In the bond market the yield on the benchmark 10-year T-note fell to 4.08% from 4.17% Thursday. The yield was at 4.13% a week ago.
The dollar softened against the euro, with little sign that the G-7 finance ministers, meeting in Boca Raton, Fla. this weekend, were ready to join forces to halt the greenback’s two-year decline. The jobs report didn’t help sentiment.
“The market was expecting a very loud payrolls number, and what it got was well short of that,” said Andrew Delano, currency strategist at IDEAGlobal in New York.
Gold advanced $5.50 to $403.60 an ounce. The metal often gains as the dollar sinks.
Crude oil futures closed 1.8% lower in New York as traders turned cautious in anticipation of Tuesday’s OPEC meeting.
Market Roundup, C4-5
