Posted on: Saturday, March 5, 2005
Markets soar on jobs report
By Michael J. Martinez
Associated Press
NEW YORK — A surprisingly strong job creation report energized Wall Street yesterday, propelling stocks sharply higher as investors grew more confident about the economy and corporate earnings. The Dow Jones industrial average and Standard & Poor's 500 index both reached 3›-year highs on the news.
Adam Rountree • Associated Press Investors worried about inflation and higher interest rates found comfort in the report. The nation's unemployment rate ticked up to 5.4 percent, from 5.2 percent in January. And hourly earnings were surprisingly flat, which means workers' paychecks aren't growing and that businesses may have a hard time raising prices.
"It hit the sweet spot," said Jack Caffrey, equities strategist at J.P. Morgan Private Bank. "You got more people getting jobs, that's the important thing, and you have growth in wages, but not enough to raise fears of inflation. And that's really helping the market right now."
The Dow rose 107.52, or 0.99 percent, to 10,940.55, its best showing since closing at 10,948.38 on June 12, 2001.
Broader stock indicators also moved sharply higher. The S&P 500 was up 11.65, or 0.96 percent, at 1,222.12, the best closing level since the index finished at 1,234.45 on July 3, 2001.
The Nasdaq composite index continued to lag behind the other major indexes, but gained 12.21, or 0.59 percent, to 2,070.61, its best close since Feb. 16.
The strong economic data overshadowed another sharp rise in crude oil prices from earlier in the week, along with lingering worries about inflation. Yesterday's gains pushed all three major indexes to post gains for the week. The Dow rose 0.98 percent, the S&P 500 was up 0.89 percent and the Nasdaq climbed 0.25 percent.
Investors could see yesterday's gains as the sharp move higher that many expected after months of uncertainty — and a fresh push toward 11,000 on the Dow could come in the next few days. The Dow last topped the psychologically important 11,000 level in intraday trading on June 13, 2001, and last closed above the mark, at 11,090.74, on June 7, 2001 — right as the dot-com bubble was bursting.
Since that time, the 9/11 terror attacks and the wars in Afghanistan and Iraq, a series of corporate scandals and a recession all took their toll, and the Dow plunged to a low of 7,286.27 on Oct. 9, 2002.
"We've seen confirmation that the economy is expanding, and that's a very strong tailwind for us to move higher," said Hans Olsen, managing director and chief investment officer at Bingham Legg Advisers.
The bond market welcomed the jobs report by sending most bond prices higher, with the yield on the 10-year Treasury note falling to 4.31 percent. Gold prices also moved higher, while the dollar fell against major currencies. Crude oil futures settled 21 cents higher at $53.78 on the New York Mercantile Exchange.
Advancing issues outnumbered decliners by more than 3 to 1 on the New York Stock Exchange, where preliminary consolidated volume came to 2.13 billion shares, compared with 2.1 billion on Thursday.
Wall Street was elated following the Labor Department's report that 262,000 jobs were created in February, far more than the 225,000 economists expected and the most in four months. Jobs were created throughout the economy, from retail to manufacturing.
Traders work on the floor of the New York Stock Exchange yesterday as the market closed with the Dow up 107.52, to 10,940.55, its best showing since closing at 10,948.38 on June 12, 2001. A strong job-creation report from the Labor Department boosted confidence.
