By Kristina Peterson
U.S. stocks climbed Friday after job losses slowed more than
expected in August, boosting hopes that the economic recovery is
still on track.
The Dow Jones Industrial Average (DJI) surged 121.78 points,
adding to a week of gains. After a bruising August, the measure is
up 2.9% this week, as traders seized on encouraging manufacturing
and jobs data as signs that the economy may avoid a double-dip
recession.
"It's very much become a binary risk-on, risk-off type of market
where you've had people that believe the recovery is going to fall
apart or the recovery stays intact," said Ed Crotty, chief
investment officer at Davidson Investment Advisors.
In the wake of encouraging jobs data, investors flooded into
riskier small-capitalization stocks and sent commodity prices
higher. The Russell 2000 index of small-cap stocks surged 1.6%, and
crude-oil prices rose above $75 a barrel.
The Nasdaq Composite (RIXF) gained 1.5% to 2,232.27. The
Standard & Poor's 500-share index (SPX) rose 1.2% to 1,103.43,
climbing above the key 1,100 level. The Dow advanced 1.2% to
10,441.12, led by a 2.3% jump in Bank of America Corp. (BAC).
The benchmark indexes got a lift after a snapshot of August's
labor market proved better than expected.
Nonfarm payrolls fell 54,000 last month, matching the level of
revised losses recorded the previous month, according to the U.S.
Labor Department. Economists had predicted a drop of 110,000. The
unemployment rate, calculated using a separate household survey,
edged up to 9.6%, as expected, after holding at 9.5% for the
previous two months. .
Traders said the private sector's addition of 67,000 jobs boded
well for the recovery's sustainability.
"It's really going to be the private sector that's got to kick
in for this to be sustainable," Crotty said.
Demand for safe-haven Treasurys slipped. The 10-year note fell,
pushing its yield up to 2.74%. The dollar weakened against the
euro, but strengthened against the yen. The euro was trading
recently at 1.2861, up from $1.2822 late Thursday in New York.
Crude-oil prices surpassed $75 a barrel, while gold futures
declined.
Asian markets gained, and the Stoxx Europe 600 index was up 1.2%
in early afternoon trading.
On the deals front, Goldcorp Inc. (GG) shed 3.2% on news that it
will acquire all outstanding shares of Andean Resources Ltd. for
$3.4 billion. Andean's principal asset is the Cerro Negro gold
project located in Argentina. .
Shares of Take-Two Interactive Software Inc. (TTWO) rallied 13%
after the company reported an unexpected quarterly profit and said
it expects a fiscal-year profit. .
Tax-preparation company H&R Block Inc. (HRB) climbed 8.5%
after reporting a smaller-than-expected loss from continuing
operations.
Campbell Soup Co. (CPB) slipped 2.4% after its fiscal
fourth-quarter earnings jumped 64% on prior-year write-downs, but
revenue at its soup business weakened.
This afternoon, Dennis Lockhart, president of the Federal
Reserve Bank of Atlanta, is scheduled to speak in Tennessee about
the economy.