Stocks Up After Encouraging Jobs Report
By CHRISTINA REXRODE
NEW YORK (AP) â¿¿ Stocks ended with a surge Friday after traders decided that a healthy job market mattered more than the Federal Reserve scaling back its economic stimulus.
After the government reported strong hiring for June, traders and investors struggled over how to react. At first, they pushed stocks higher because the report was better than expected. Then they pushed stocks lower because improved hiring last month made it more likely the Federal Reserve could ease back on its bond buying.
After waffling early, investors and traders finally settled on an optimistic outlook. The Standard & Poor's 500 had its strongest performance in three weeks."In general, I think our economy is standing on its own two feet right now," said David Brown, chief market strategist at Sabrient, a Santa Barbara, Calif., research firm for institutional investors. U.S. stock indexes shot higher when the market opened, fueled by the Labor Department's report that the U.S. economy added a stronger-than-expected 195,000 jobs last month. But the gains tapered off within the hour, and all the major indexes dipped briefly into the red. By the end of the day, the three main U.S. indexes had more than recovered, each ending about 1 percent higher. The Dow Jones industrial average rose 147.29 points to 15,135.84. The S&P 500 rose 16.48 points to 1,631.89. The Nasdaq composite climbed 35.71 to 3,479.38. "I think the initial reaction was, 'Yay, all these people are employed, and then, 'whoops,'" Brown said, during late-morning trading. The whiplash day illustrated the complex and outsized role that the Fed has played in the stock market in recent weeks. The Federal Reserve, led by Chairman Ben Bernanke, has been propping up the economy by buying bonds and keeping interest rates low. Investors know that the Fed isn't going to continue the stimulus forever, but they worry that developments like Friday's positive jobs report could make the Fed yank away the stimulus too soon.
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