NEW YORK, July 9: A powerful rally lifted stocks on Friday as a solid if less than spectacular report on job growth helped Wall Street traders focus on an economic scenario that is neither too hot nor too cold.
The Dow Jones Industrial Average shot up 146.14 points (1.43 per cent) to 10,449.14 while the Nasdaq advanced 37.22 points (1.79 per cent) to 2,112.88, the highest level for the teach-heavy index since January 3.
The broad-market Standard and Poor’s 500 climbed 13.99 points (1.17 per cent) to 1,211.86, a fraction below its starting point for 2005.
The government reported the US unemployment rate fell to a four-year low of 5.0 in June, while the economy added a weaker-than-expected 146,000 jobs. But upward revisions to earlier data suggested relatively strong job growth.
“The US economy’s performance may once again start inspiring the ‘Goldilocks’ metaphor, with growth and hiring both running at a pace that is nearly just right for the Fed,” said CIBC World Markets analyst Leslie Preston.
The rally followed an impressive rebound Thursday as the initial shock of the deadly terrorist attacks in London faded.
“Wall Street followed Thursday’s gritty comeback with a sharp, broad-based rally today,” said Alfred Goldman at AG Edwards.
“The market’s ability to sidestep terrorism concerns may be prompting investors to take another look at stock values. The Dow enjoyed its biggest point gain since April 21, and the Nasdaq finished above 2,100 for the first time since January.”
European stock markets recovered from heavy losses the day before when bombs ripped through London’s transport network.
In London, the FTSE 100 index closed up 1.43 per cent at 5,232.2.
In Frankfurt, the Dax closed 1.50 per cent higher at 4,597.97, while the Paris CAC 40 hit a three-year high, rising 1.89 per cent to 4,300.31.
Among active shares on Wall Street, Alcoa rallied 1.11 to 27.20 after the aluminum giant, traditionally the first blue chip firm to report quarterly results, topped Wall Street forecasts with a record 460 million dollar profit.
General Electric climbed 81 cents to 34.99 after Morgan Stanley analyst Scott David said the industrial conglomerate’s stock has more upside potential than downside risk.
Siebel Systems fell 20 cents to 8.59 after the software company projected second-quarter revenue below the average analyst forecast.
Morgan Stanley fell 22 cents to 53.12 after disclosing that former chief executive Philip Purcell will receive about 44 million dollars in fiscal 2005 and 2006 combined, depending on the company’s earning results those years.
Airline stocks recovered from Thursday’s sell-off, helped by lower crude oil prices and a view that the London blasts may have only a modest impact on travel.
Northwest Airlines jumped 28 cents to 4.41, American Airlines holding group AMR added 60 cents to 12.68 and Continental rose 73 cents to 14.04.
Bonds dipped after gains in the prior session, as investors shifted to equities on signs of economic strength. The yield on the 10-year Treasury bond rose to 4.109 per cent from 4.031 per cent Thursday and that on the 30-year bond pushed up to 4.361 per cent from 4.302 per cent. Bond yields and prices move in opposite directions.—AFP
