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Dow Makes Record Highs a Habit After Robust Jobs Report

NEW YORK (TheStreet) -- The Dow Jones Industrial Average earlier in the session smashed through 14,400 for the first time, before pulling back by the close to post its fourth-straight record closing session. The Dow and the S&P 500 booked a six-day winning streak on Friday.

Overall, major U.S. stock averages booked a positive session after a robust February employment report showed a decline in the unemployment rate to near pre-recession levels.

Treasury yields were popping late Friday afternoon.

The encouraging jobs growth number of 236,000 "affirms or confirms the movement in the stock market," said Darrell Cronk, regional chief investment officer for Wells Fargo Private Bank, which has more than $169 billion in assets under management. "It takes away this argument that the Federal Reserve is doing all the heavy economic lifting. That the economy itself, whether you look at this jobs report or some of the numbers you've seen in initial jobless claims or the ADP report, or the ISM, all of those economic indicators are starting to directionally move for us to" a more positive outlook.

Cronk, who thinks the nonfarm payrolls report for February was a "great" report, noted that the unemployment rate, which fell two tenths of 1%, was the lowest unemployment rate the economy has seen since December 2008, so "it again confirms that we're moving back to almost pre-recession levels which is encouraging," though it's not yet at the Fed's 6.5% unemployment target.

"Understand that one month does not make a trend, but certainly we're heading in the right direction," he said.

The Dow advanced 67.58 points, or 0.47%, at 14,397.07, earlier spiking to an intraday high of 14,413.17. The blue-chip index surged 2.18 on the week.

Breadth was positive, with winners outnumbering losers 23-7.

McDonald's (MCD), Home Depot (HD), Walt Disney (DIS) and 3M (MMM) led the gainers.

McDonald's said global comparable-store sales rose 1.7% in February, excluding a negative calendar shift as February 2012 included an extra day because it was a leap year. Shares rose 1.7%.

Bank of America (BAC) , JPMorgan (JPM) and Intel (INTC) fell the most.

The S&P 500 rose 6.92 points, or 0.45%, at 1,551.18. The index popped 2.17 for the week. The Nasdaq finished ahead by 12.28 points, or 0.38%, at 3,244.37. The tech-heavy index jumped 2.35% in the past five days.

All sectors in the broader market were trading higher, led by capital goods, consumer cyclicals and services.

Volumes totaled 3.58 billion shares on the New York Stock Exchange and 1.61 billion on the Nasdaq. Advancers were edging decliners by a ratio of 2-to-1 on the Nasdaq and Big Board.

Shortly after the report, the 10-year Treasury yield spiked to about 2.07% from about 1.96% Thursday, a relatively big move in the bond market as positive sentiment continued to drive the movement towards equities and away from fixed-income assets or bonds. Cronk said this trend continues to confirm his team's tactically overweight position in large- cap stocks and underweight position in fixed-income.

The Bureau of Labor Statistics reported Friday that nonfarm payrolls increased by 236,000 in February after rising by a downwardly revised 119,000 in January. Expectations were for a rise to 160,000.

The unemployment rate edged down to 7.7% in February; economists were expecting the rate to stay at 7.9%.

Private nonfarm payrolls rose by 246,000 after increasing by 166,000 jobs in January. Economists were predicting a rise of 167,000.

Cronk said that the private nonfarm payrolls number was "outstanding," with broad industry gains, and indicated to him a closing of the gap between strong corporate profitability and hiring, vs. the last two years when there were record corporate profits but a lack of hiring.

The only negative factor in the overall jobs report was downward revisions for January, but Cronk noted that most of those revisions were attributable to government hiring.

In other economic news, the Census Bureau said wholesale inventories increased 1.2% in January after rising an upwardly revised 0.1% in December.

Gold for April delivery rose $1.80 to settle at $1,576.90 an ounce at the Comex division of the New York Mercantile Exchange, while April crude oil futures closed up 39 cents to $91.95 a barrel.

At last check, the benchmark 10-year Treasury was plunging by 15/32, raising the yield to 2.057%. The dollar was popping 0.79%, according to the U.S. dollar index.

The FTSE 100 in London added 0.69% and the DAX in Germany finished higher by 0.59%.

Hong Kong's Hang Seng index closed up 1.41% after China reported a surprise trade surplus in February despite the Chinese Lunar New Year holidays.

Japan's Nikkei finished ahead by 2.64% on the back of Thursday's upbeat U.S. data and the Bank of Japan's improved economic outlook.

In corporate news, Ann Inc. (ANN) provided a first-quarter sales outlook of $600 million, ahead of analysts' expectations of $593.31 million.

The retailer posted fourth-quarter earnings of 5 cents a share on sales of $607.7 million versus the consensus target of earnings of 1 cent a share on sales of $617.8 million. Shares popped 7.9%.

Foot Locker (FL) posted fourth-quarter earnings of 73 cents a share, as expected. Revenue came in at $1.71 billion, compared with expectations of $1.69 billion. Shares slumped 7.1%.

Pandora Media's (P) fourth-quarter results beat Wall Street estimates, led by a huge jump in revenue. Pandora also announced that Chairman and CEO Joe Kennedy would be stepping down, but would remain CEO until a successor is found. Shares surged 17.6%.

Texas Instruments (TXN) narrowed its first-quarter outlook to the higher end of its prior estimates. Shares ticked up 0.26%.

Google's (GOOG) Motorola Mobility hardware unit has begun laying off about 1,200 employees, or more than 10% of its headcount, according to a company email reviewed by The Wall Street Journal. Shares of Google lost 0.13% on Friday.

Private-equity firm KKR (KKR) reached a deal to buy Gardner Denver (GDI), the industrial-pumps manufacturer, for $76 a share in a cash transaction valued at about $3.9 billion. Gardner shares rose 1.2% and KKR shares were up 1.2%.

Smithfield Foods (SFD) shares jumped 4.5% after the pork processor confirmed the company's board received a memorandum from shareholder Continental Grain Thursday. Continental Grain is asking Smithfield to consider splitting into three businesses after its shares lagged behind those of its rivals.

H&R Block (HRB) shares increased 9.2% after the tax preparation company anticipated an improvement in 2013 earnings thanks to cost-reduction plans.

Citigroup (C) shares rose 3.7% as the firm's superior performance in the Federal Reserve's annual stress tests suggests that the bank has made progress in de-risking its balance sheet and is well-placed to return more capital to shareholders , analysts said in early reactions to the results.

-- Written by Andrea Tse and Joe Deaux in New York.



>To contact the writer of this article, click here: Andrea Tse.

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