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Stocks Finish Higher; Dow Poised Below 11,000

Stocks closed up Monday as investors cheered growth of 162,000 jobs in March and data showed improvement in the services and housing sectors.



) -- Stocks rose Monday and oil prices hit an 18-month high as Friday's news of March job growth and morning data showing improving conditions across the services and housing sectors made investors bullish on the U.S. economy's recovery.


Dow Jones Industrial Average

, however, was unable to break through 11,000, finishing the session roughly 26 points shy of the mark.

The blue-chip index lingered near 11,000 for most of the session, running as high as 10,988, before closing up 47 points, or 0.4%, at 10,974 for its highest finish since Sept. 26, 2008. The

S&P 500

added 9 points, or 0.8%, at 1188, while the


had a big day, gaining 27 points, or 1.1%, to 2430.

On Friday, the Labor Department said the U.S. economy added 162,000

nonfarm payrolls in March, after shedding 14,000 in February. Economists had projected 190,000 new jobs. The unemployment rate held at 9.7%, which was in line with expectations. Only the bond market opened for a few hours on Friday, a holiday.

"Excluding census hiring, state and local government shed 9,000 jobs, while the private sector added 123,000 jobs. Some of these gains were likely an upward correction to the winter-storm-dampened February payrolls, but the trend since January is positive, with the private sector adding an average of 65,000 jobs per month over the last two months," said Heidi Shierholz, an economist with the Economic Policy Institute.

"However, as nearly 400,000 workers entered or re-entered the labor market in March, the increase in payroll jobs was not enough to move the dial on unemployment, which held steady at 9.7%," she said.

Data released Monday morning showed improving conditions within the services and housing sectors. The Institute for Supply Management said the U.S. services sector grew at the swiftest pace in nearly four years in March, and the National Association of Realtors said pending home sales rose 8.2% in February.

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The Federal Reserve Board of Governors met in a regular meeting on Monday but made no formal announcing a change to its

discount rate, surprising some market watchers who had been expecting an increase of as much as 50 basis points to 1.25%.

Overseas, Japan's Nikkei rose 0.5%. Hong Kong's Hang Seng was closed for a holiday. Most European markets also were closed.

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The Economy

The U.S. services sector showed its strongest growth since May 2006 as the ISM's non-manufacturing index jumped to 55.4 from 53 in February, which was upwardly revised from 50. March's level exceeded economists' expectations for a reading of 53.5.

Pending home sales -- those that involve a signed contract but haven't closed -- also showed improvement, according to the National Association of Realtors, which said its Pending Home Sales Index jumped 8.2% to 97.6 in February from a downwardly revised level of 90.2 in January.

Shares of U.S. homebuilders gained on the news with


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KB Home

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Hovnanian Enterprises

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all gaining at least 2% during the day's session. The

SPDR S&P Homebuilders ETF

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added 30 cents, or 1.8%, to $17.28.


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Company News

Late in Monday's session, the U.S. Transportation Department said it slapping


(TM) - Get Toyota Motor Corp. Report

with a maximum penalty of $16.4 million for failing to alert the government of vehicle safety violations in a timely manner. The stock closed 77 cents, or nearly 1%, higher at $81.26 but was losing 14 cents in after-hours trading.


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was among the Dow's best performers, preceded by

American Express

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Cisco Systems

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(PFE) - Get Pfizer Inc. Report

, meanwhile, were the Dow's biggest laggards.

The Dow was saw volume of nearly 140 million shares, compared with an average of 200 million. Shares of


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Bank of America

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Ford Motor

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were the most heavily traded on the

New York Stock Exchange

, which had a listed volume of 3.9 billion.


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shares soared $2.54, or 1.1% higher to $238.49 after the company said it sold more than 300,000 iPad devices on the tablet's Saturday debut.

Shares of



rose by 8 cents, or 0.2%, to $37.83 after the retail drugstore chain said March sales rose 6.4% to $5.82 billion.


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will stomach a charge of 40 cents to 45 cents a share after opting out of its proposal to spin off its Enexus Energy nuclear generation unit. The company also said it would raise its quarterly dividend to 83 cents a share from 75 cents a share and authorized a new $750 million share repurchase program. The stock finished down by 71 cents, or 0.9%, to $81.61.


chip sales in February fell 1.3% month-over-month, according to the Semiconductor Industry Association although year-over-year, sales were up 56.2%. The

Semiconductor HOLDRs ETF

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gained 69 cents, or 2.5%, to $28.61.

SandRidge Energy

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is buying

Arena Resources

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for roughly $1.6 billion, according to a report.


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Commodities and the Dollar

The May crude oil contract added $1.75, soaring 2.1%, to settle at $86.62 a barrel. The June

gold contract, meanwhile, added $7.70, or 0.7%, to settle at $1,133.80 an ounce.


dollar was trading lower against a basket of currencies, with the dollar index down by 0.06%.


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The government's $8 billion sale of 10-year Treasury inflation-protected securities attracted strong demand, with a bid-to-cover ratio of 3.43 and a high yield of 1.709%.

The benchmark 10-year Treasury weakened 12/32, lifting the yield to 3.988%. Earlier in the session, the yield touched 4% for the first time since June 2009.

The two-year note fell 5/32, raising the yield to 1.176%. The 30-year bond slipped 19/32, boosting the yield to 4.839%.

--Written by Melinda Peer in New York



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