Stocks Stage Impressive Rally

The Treasury market which focuses almost exclusively on monetary policy and inflation also found solace in the numbers.

The 10-year Treasury note was up 22/32, yielding 4.08%, after the employment statistics reassured bond investors that interest rates will remain low for the foreseeable future.

Meanwhile, the dollar was weaker vs. both the euro and the Japanese yen. The European single currency was recently worth $1.2701, while the dollar was fetching 105.47 yen. However, currency traders were wary of pushing the dollar much lower; the greenback may find support over the weekend. Finance ministers and central bankers from the Group of Seven nations meet in Florida today and tomorrow amid growing speculation that members will pressure the U.S. to do something about the slumping dollar. (See Thursday's market story for further analysis.)

The news wasn't all bad, however; aside from the headline number, many economists found elements of the report to spur optimism.

"The workweek registered a solid snapback and the unemployment rate ticked lower as the household survey showed another big job gain," said David Greenlaw, U.S. economist at Morgan Stanley. "There are widespread indications of at least some underlying improvement in labor market conditions. So, we continue to expect to see an upturn in the payroll employment data relatively soon."

Foreign Markets

Markets overseas ended mostly higher. London's FTSE 100 added 0.4% at 4403 and Germany's Xetra DAX improved 0.8% at 4045. In Asia, Hong Kong's Hang Seng closed 2.1% higher at 13,310 and Japan's Nikkei was down 0.04% to 10,461 at the finish.

Movers

Shares of Ericsson(ERICY Quote) moved higher after the Swedish telecom-equipment company reported a fourth-quarter profit from a loss a year ago. Ericsson also said it believes the market has stabilized and that growth in the global mobile systems market in 2004 will be in line or above 2003's levels. Both Goldman Sachs and Fulcrum Global Partners upgraded the company after the news and the stock jumped $3.07, or 13%, at $26.77.

Interest rate-sensitive sectors rallied sharply, in anticipation low rates would continue to boost their businesses. The Amex Broker/Dealer index gained 2.4% on the day and homebuilders rallied 4.1%. In addition, the Philadelphia Semiconductor Index finished up 4.8%.