Stocks jump after report shows employers cut fewer jobs than forecast in Feb.; Dow gains 122
Stocks jumped Friday after the government’s employment report showed fewer jobs were cut in February than expected.
Major stock indexes climbed more than 1 percent, including the Dow Jones industrial average, which rose 122 points to add to strong gains for the week. Treasury prices slid as demand for safe havens eased.
The Labor Department’s monthly report is seen as the most important measure of the economy’s health. A drop in unemployment is necessary for the economy to make a sustained rebound.
The better-than-expected jobs report helped push oil and other commodities higher on expectations that demand for resources would increase as the economy strengthens. That helped energy and material companies like
The market extended its gains in the final hour of trading after the
The report raised expectations that consumers are starting to increase their spending. On Thursday, many retailers posted stronger sales for January.
But it was the jobs report that gave the market an early push. Employers cut 36,000 jobs last month, better than the 50,000 cuts forecast by economists polled by Thomson Reuters. The unemployment rate held steady at 9.7 percent. Economists were expecting it to rise to 9.8 percent.
Friday’s gains followed a jump at the start of the week on a handful of corporate takeover announcements. Traders often look to buyouts as a sign of confidence among corporate leaders. Though employers aren’t yet adding full-time staff, jobs growth is fundamental to a recovery because it puts money in more workers pockets, allowing them to increase spending.
“We haven’t won the game yet,” said James Meyer, chief investment officer at Tower Bridge Advisors. “We’re just getting back to neutral. You can’t get from negative to positive without crossing zero.”
The Dow rose 122.06, or 1.2 percent, to 10,566.20, its highest close since Jan. 20. It was the Dow’s best point and percentage gain since Feb. 16.
The Standard & Poor’s 500 index rose for a sixth straight day, rising 15.73, or 1.4 percent, to 1,138.70. The
Five stocks rose for every one that fell on the
For the week, the Dow rose 2.3 percent, its best advance since the week ended Feb. 19.
The coming week brings the one-year anniversary of the market’s rebound. On March 9, 2009, major stock indexes tumbled to 12-year lows as concern grew about the economy.
Meanwhile, bond prices fell on signs of the improving economy. The yield on the benchmark 10-year Treasury note, which moves opposite its price, rose to 3.69 percent from 3.61 percent late Thursday.
The prospect of future job growth also encouraged traders. Temporary workers, which are often seen as a precursor to employers adding full-time staff, rose 48,000 last month. Average hourly earnings rose by 3 cents to $22.46.
The Labor Department wouldn’t quantify how severe snowstorms that pummeled the East Coast last month might have had swayed the report. Economists estimated before the report that the storms could inflate job losses by 100,000 or more.
Jerry Harris, president and chief investment officer at Sterne Agee Asset Management, said March’s results could be even better because the bad weather likely made February’s job losses worse.
Energy companies were among the biggest winners on the day as oil rose $1.29 to $81.50 a barrel.
Financial stocks also got a boost from the improved employment numbers, which might lead to fewer loan losses. A recovery in the labor market is “the most critical factor” in getting more people to keep up with their debts, said Edward Crotty, chief investment officer at Davidson Investment Advisors.
Bank of America Corp. rose 30 cents to $16.70, while
After announcing the launch date for the iPad, Apple rose $8.24, or 3.9 percent, to $218.95. It rose as high as $219.70 during trading.
The dollar fell against other major currencies, while gold rose.
The Russell 2000 index of smaller companies rose 13.55, or 2.1 percent, to 666.02.
Overseas markets rose on the U.S. jobs report, and after a successful bond sale by debt-burdened Greece. Budget and debt problems in Greece have dogged the markets in recent months.
The Dow Jones industrial average closed the week up 240.94 points, or 2.3 percent, at 10,566.20. The Standard & Poor’s 500 index rose 34.21, or 3.1 percent, to 1,138.70. The
The Russell 2000 index, which tracks the performance of small company stocks, rose 37.46, or 6 percent, for the week to 666.02.
The Dow Jones U.S. Total Stock Market Index — which measures nearly all U.S.-based companies — ended at 11,726.82, up 383.65, or 3.4 percent.