Stocks Surge on Reassuring Jobs Report

[The Finman]

<h2><font color=#003399>Stocks Surge on Reassuring Jobs Report</font></h2>
NEW YORK — Stocks surged Friday, with the Dow and the S&P 500 both reaching 3 1/2-year highs, after a better-than-expected jobs report increased optimism about the economy but didn't raise worries about accelerated interest-rate hikes by the Federal Reserve.

The Dow Jones industrial average gained 107.52 points, or 0.99 percent, to end at 10,940.55. The Standard & Poor's 500 Index rose 11.65 points, or 0.96 percent, to finish at 1,222.12. The Nasdaq Composite Index rose 12.21 points, or 0.59 percent, to close at 2,070.61.

The Dow closed at its highest level since June 2001, putting it back in sight of the psychologically important 11,000 mark, while the S&P 500 closed at its highest since July 2001. Only three of the 30 Dow stocks closed lower.

For the week, the Dow was up 0.90 percent, the S&P 500 rose 0.91 percent, and the Nasdaq was up 0.34 percent.

"The catalyst for the rally today is the payroll report," said Brian Pears, head of equity trading at Victory Capital Management. "I think that most traders thought the economy was in relatively good shape, but this gives us an inkling that the economy is even stronger than we thought."


According to the Labor Department (search), 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.

Investors fearing inflation — especially with the increased consumer demand that comes with job creation — were assuaged somewhat by other aspects of the report. The nation's unemployment rate ticked up to 5.4 percent, from 5.2 percent last month. 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."


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