Friday: April Jobs up Solidly, Wage Pressures Still Modest

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By Justin Lahart
Staff Reporter

This is the way the week ends. Not with a whimper. But a boom.

The highly anticipated April

Nonfarm payrolls

report showed an increase of 142,000, well below consensus estimates of 200,000. Moreover, wage figures showed a tiny decline. But those bullish indicators were partially undercut by a lower-than-expected April

unemployment rate

, which came in at 4.9%, 0.3% below consensus estimates.

"It will be a good rally," says one trader. "The market's been waiting for this."

"The budget agreement ultimately overshadows the jobs report," says Jack Baker, head of trading at

Furman Selz

. A balanced budget amendment is widely reported to be in the works for today. Speculation that a deal was in the offing sent the 30-year Treasury bond nearly a half point higher yesterday. Baker says that if the deal goes through, that could send the market broadly higher.

Chatter of a budget deal, ushered in by the 1994 "Republican Revolution" also sparked a sharp rally in stock and bond prices through 1995.

The futures and bond markets are pointing to a solid open. The

S&P 500

futures are up more than 2 points. Last night, they closed above fair value, so that flips the switch on buy programs. The 30-year Treasury bond has fluctuated wildly this morning, as traders try to digest the numbers. Now its up 1/32 at 96 15/32, putting the yield at 6.92%.

Biocontrol Technology

(BICO)

blamed its four-point drop yesterday on rumors being spread by shortsellers. The company said that testing for its noninvasive glucose sensor for diabetics are going forward.

Shares of

Bre-X

(BXMNF)

could heat up today. The independent analysis of deposits from its Busang gold find are expected today or Monday.

Fisher Scientific

(FSH)

reported first-quarter earnings of 53 cents a share, 2 cents below consensus analyst expectations as measured by

First Call

.

Japan stocks hit their highs for the year today, with international blue-chips leading the way despite a softening of the dollar. Futures-led buying in the last few minutes of trade made for more than half of the day's gains. The

Nikkei

closed at 19,514.75, up 239.42.

Hong Kong stocks also traded higher, though the didn't post as impressive gains as their Japanese brethren. Many investors were reportedly sticking to the sidelines ahead of today's crucial U.S. economic data. The

Hang Seng

closed up 60.91 at 13,081.70.

German stocks came back from their May Day vacation to trade higher. Traders their are scratching their heads over a more than 5% gain in

Volkswagen

-- the car maker will announce earnings next week. Good news, perhaps? The

Dax

closed up 22.30 at 3460.37.

The unexpected breadth of the Labour victory in yesterday's U.K. general election sent the

FTSE

down 25 points at the open. But since then, British stocks have clawed their way back.

"We've obviously started out on a weaker footing this morning, but the market has recovered it's poise and the equity market moved up into positive territory," said

NatWest

U.K. strategist David McBain earlier this morning. "While the extent of the Labour victory was not anticipated, a victory was already factored into the market."

"Clearly, the U.S. economic data is the next hurdle for the day," said McBain.

The

FTSE

is up 15.6 at 4460.6.