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Wall Street shrugs off January job losses of 598,000

February 07, 2009|Associated Press

Stocks surged Friday, sending the Dow Jones industrials up more than 200 points, as investors looked beyond another bleak report on job losses and bet that the government's emerging plans to help the economy would yield success.

All the major stock indexes rose more than 2% and posted their first weekly gain after four straight weeks of losses.

The Standard & Poor's 500 index trimmed its year-to-date loss to less than 4%, and the Nasdaq composite crossed into positive territory.

Friday's gains came as the Senate moved closer to a vote on its version of a stimulus plan that would include a mix of spending and tax cuts. After markets closed, Senate Democratic leaders said they believed a revised proposal would have enough votes to pass.

Financial stocks led the market Friday as investors also awaited the Obama administration's revisions to the government's $700-billion financial rescue. Treasury Secretary Timothy F. Geithner is expected to announce the changes in a speech Monday.

An index of financial companies in the S&P 500 gained 8.1% on the day.

Investors were unfazed after the Labor Department said U.S. employers slashed 598,000 jobs in January. The unemployment rate rose to 7.6%, the highest since late 1992.

The Dow industrials rose 217.52 points, or 2.7%, to 8,280.59 after gaining 106 on Thursday.

Broader stock indicators also jumped. The S&P 500 rose 22.75 points, or 2.7%, to 868.60, while the Nasdaq composite index shot up 45.47 points, or 2.9%, to 1,591.71.

The Nasdaq ended the week with a 7.8% gain, while the Dow was up 3.5% and the S&P 500 rose 5.2%.

The Russell 2,000 index of smaller companies jumped 3.4% Friday and was up 6.1% for the week.

Advancing issues outnumbered decliners Friday by about 5 to 1 on the New York Stock Exchange.

On Thursday, the major indexes soared more than 1% as Wall Street shrugged off a set of troubling economic reports.

The Treasury bond market was mixed. The yield on the benchmark 10-year Treasury note rose to 2.98% from 2.9% late Thursday. The yield on the three-month T-bill, considered one of the safest investments, rose to 0.28% from 0.27%.

The dollar was mostly higher against other major currencies. Gold prices edged higher.

Oil futures fell $1 to $40.17 a barrel on the New York Mercantile Exchange.

In the stock market, many of Friday's steepest gains came in hard-hit sectors such as banking and retailing.

Among financial stocks, Bank of America rocketed 27% a day after hitting a 25-year low as Chief Executive Ken Lewis told CNBC that a government takeover of the bank was "not even a remote possibility."

Wells Fargo rallied 18%, JPMorgan Chase shot up 13%, U.S. Bancorp added 8%, Fifth Third Bancorp soared 60% and State Street advanced 11%.

Among retailers, Macy's advanced 11% and Home Depot climbed 5%.

In other market highlights:

* Corning rose 6.9%. The world's largest maker of liquid-crystal-display glass used in flat-panel TVs said it expected demand and sales to rebound in the second quarter.

* Overseas, key stock indexes climbed 1.5% in Britain, 1.5% in Germany, 1.8% in France and 1.6% in Japan.

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