Stocks close higher on jobs optimism
Dow up 2.9% for week, turns positive for year
By Kristina Peterson and Jonathan Cheng,
NEW YORK (MarketWatch) -- Investors pushed stocks up for the fourth day in a row, sailing into the long weekend on a high note as an encouraging jobs report sent stocks to their best pre-Labor Day week in two decades.
The Dow Jones Industrial Average /quotes/comstock/10w!i:dji/delayed (DJIA 10,448, +127.83, +1.24%) finished up 127.98 points, or 1.24%, to 10447.93, putting the Dow up 2.9% on the week -- its first positive weekly showing since the beginning of August. The Dow also edged back into positive territory for the year.
The market leaped after nonfarm payrolls data showed jobs slowing at half the rate predicted by economists. The Labor Department said the U.S. lost 54,000 jobs last month, about half of what economists had expected and matching the level of revised losses recorded the previous month.
The unemployment rate, calculated using a separate household survey, edged up to 9.6%, as expected, from 9.5% for the previous two months.
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• See all the latest markets video /conga/story/misc/markets.html 84614 "In the last two weeks or so, things have been starting to firm up, and today's jobs numbers really put an exclamation mark on that," said Phil Orlando, equity strategist at Federated Investors. "We're feeling a lot more comfortable about our view, than those thinking about a double dip."
Orlando predicted that stocks would pick up after Labor Day, as vacationing money managers return to an economy whose outlook has improved.
"If you had a bearish bent in the middle of August when you went on vacation, the story seems different today -- it seems constructive," he said.
Not everyone was impressed. Bob Browne, chief investment officer at Northern Trust Global Investments, said the addition of new private-sector jobs is "not enough to absorb new entrants into the work force let alone put the unemployed from the past few years back to work," adding: "We have a long way to go."
But even slowing job losses was "enough to give us a catalyst on a light day going into a long weekend," he said.
The Nasdaq Composite /quotes/comstock/10y!i:comp (COMP 2,234, +33.74, +1.53%) rose 1.53% to 2233.75, up 3.7% on the week. The Standard & Poor's 500-stock index /quotes/comstock/21z!i1:in\x (SPX 1,105, +14.41, +1.32%) tacked on 1.32% to 1104.47, putting its advance for the week at 3.7%.
Goldman Sachs Group /quotes/comstock/13*!gs/quotes/nls/gs (GS 147.29, +7.51, +5.37%) rose 5.4% as financial stocks led the day's and week's gains. Morgan Stanley /quotes/comstock/13*!ms/quotes/nls/ms (MS 26.66, +0.98, +3.82%) gained 3.8%, J.P. Morgan Chase /quotes/comstock/13*!jpm/quotes/nls/jpm (JPM 39.17, +1.01, +2.65%) added 2.7% and Genworth Financial /quotes/comstock/13*!gnw/quotes/nls/gnw (GNW 12.03, +0.68, +5.99%) advanced 6%.
Friday's jobs numbers followed recent reports on manufacturing and housing that also came in above expectations, extending a notable reversal from a long string of disappointing data that had driven the Dow's biggest August drop since 2001.
The Politics of 9.6% UnemploymentColumnist Mary Anastasia O'Grady breaks down the August jobs report and the implications for November elections. Editorial Writer Anne Jolis in London discusses a new development in the disturbing Climategate emails.
Volume was light, with about 3.6 billion shares changing hands in NYSE composite trading, short of 2010's daily average of about five billion shares.
"The fear is really building towards a sharp movement upwards rather than downwards," said Joe Greco, managing director for Meridian Equity Partners. "Most of the bullets have been used from the sell side, and any strong data is going to fuel the momentum trade and short covering."
The strong start to the month comes as investors have been encouraged that a double-dip recession may be avoided. But the economic recovery still looks weak; data released Friday by the Institute for Supply Management showed a slowing expansion in the U.S. nonmanufacturing sector last month.
The U.S. Dollar Index /quotes/comstock/11j!i:dxy0 (DXY 82.02, +0.64, +0.79%) , reflecting the U.S. currency against a basket of six others, declined 0.5%. Treasurys slipped, pushing the yield on the 10-year note /quotes/comstock/31*!ust10y (UST10Y 2.71, 0.00, 0.00%) up to 2.71%. Crude-oil futures dropped to $74.34 a barrel, while gold futures also slipped.
On the deals front, Goldcorp /quotes/comstock/13*!gg/quotes/nls/gg (GG 42.84, -0.96, -2.19%) slipped 2.3% after the gold miner agreed to acquire all outstanding shares of Andean Resources /quotes/comstock/11t!and (CA:AND 6.98, +2.17, +45.11%) for $3.4 billion. Andean's principal asset is the Cerro Negro gold project located in Argentina. Read more about GoldCorp's deal.
Shares of Take-Two Interactive Software Inc. /quotes/comstock/15*!ttwo/quotes/nls/ttwo (TTWO 9.50, +0.65, +7.34%) rallied 10% after the company reported an unexpected quarterly profit and said it expects a fiscal-year profit. Read more about Take-Two's results.
Tax-preparation company H&R Block Inc. /quotes/comstock/13*!hrb/quotes/nls/hrb (HRB 13.30, +0.73, +5.81%) climbed 5.8% after reporting a smaller-than-expected loss from continuing operations.
Campbell Soup Co. /quotes/comstock/13*!cpb/quotes/nls/cpb (CPB 36.21, -1.11, -2.97%) slipped 2.4% after its fiscal fourth-quarter earnings jumped 64% on prior-year write-downs, but revenue at its soup business weakened
