Updated from 4:06 p.m. EDT
Falling oil and evidence of a gradually improving labor market that is unlikely to overheat triggered a broad rally in stocks Friday. The major averages enter earnings season on an uptrend, boosted by a relative absence of high-profile profit warnings.
Dow Jones Industrial Average
rose 146.85 points, or 1.43%, to 10,449.14, while the
added 13.99 points, or 1.17%, to 1211.86. The
rose 37.22 points, or 1.79%, to 2112.88. Both the Dow and Nasdaq saw the largest point gains since April 21, while the S&P 500 had its best day since May 4.
For the week, the Nasdaq rose 2.69%, the S&P 500 added 1.46%, and the Dow rose about 1.41%.
Trading volume on the
New York Stock Exchange
was 1.49 billion shares, with advancers beating decliners by a 3-to-1 margin. Volume on the Nasdaq was 1.68 billion shares, with advancers outpacing decliners 7 to 3.
"As much as we've done today, volume finished below average," said Paul Nolte, director of investments at Hinsdale Associates. "Investors may be getting more excited that the economy is looking better. Now we've got some euphoria that earnings may not be that bad. The wild card will be how much energy plays into earnings."
The Dow was led by a 4.3% gain in
and a 3.4% jump in shares of
. Other Dow components posted strong gains as well, with
higher by 2.5% and
In other markets, the 10-year Treasury bond fell 7/32 in price to yield 4.09%, while the dollar rose against the yen and against the euro.
"Today's catalyst is definitely the employment report," said Barry Hyman, equity market strategist with Ehrenkrantz King Nussbaum. "It was good but not great, but it doesn't fuel the inflation fire."
The Labor Department said 146,000 nonfarm jobs were added in June, while the unemployment rate fell to 5%, the lowest level since August 2001. The payroll number was about 50,000 short of economists' estimates, although the deficit was offset by upward revisions in April and May.
"The report is supportive of an economy growing at a solid pace," said Michael Sheldon, chief market strategist with Spencer Clarke. "Some of the positives include revisions to last month, as well as average duration of workers being unemployed. On the negative side, the manufacturing sector continues to bleed."
Sheldon added: "The employment report suggests no change to the Fed. It's steady as she goes, so I expect a quarter-point increase at the next meeting."
Oil declined despite the threat of Hurricane Dennis after being upgraded to Category 4, potentially causing supply disruptions in the Gulf of Mexico. August crude finished down $1.10 to $59.63 a barrel after reaching $61.90 earlier in the session. Dennis is expected to cross Cuba and move toward the U.S. mainland over the weekend.
In London, emergency workers continued the grim task of clearning up after Thursday's terrorist bombings, which killed at least 50 people and left more than 700 injured.
"This has been a most terrible and tragic atrocity that has cost many innocent lives," British Prime Minister Tony Blair said. "It is through terrorism that the people that have committed this terrible act express their values, and it is right at this moment that we demonstrate ours."
Virtually every sector performed well Friday, with materials, semiconductors, biotech and retail showing considerable strength. The only weaker-performing sector was energy, after crude fell below $60.
Among stocks, Bear Stearns raised its revenue forecast for Intel, citing stronger-than-expected June shipments and a positive outlook for PC builds in the third quarter. The firm now sees revenue for the third quarter of $9.25 billion and EPS of 33 cents, both slightly above its prior forecasts. Intel rose 72 cents, or 2.7%, to $27.28.
Alcoa's second-quarter earnings rose 14% from a year ago to $460 million, or 52 cents a share, boosted by an asset sale and tax gain. Continuing earnings of 46 cents a share were a penny ahead of forecasts. Alcoa was up $1.11, or 4.3%, to close at $27.20.
previewed a weak second quarter Thursday night, saying operating earnings and revenue will trail its previous guidance. New license sales in the quarter will be about $12 million light, at $78 million. Siebel lost 20 cents, or 2.3%, to $8.59.
said third-quarter earnings rose 45% from a year ago to $305 million, or 51 cents a share, on an 11% jump in revenue to $4.5 billion. The EPS number was 8 cents ahead of Wall Street forecasts. The stock was higher by $2.01, or 9.1%, to finish at $24.21.
cut its second-quarter revenue forecast to a range of $45 million to $46 million from a previous range of $50 million to $53 million. The company cited weaker performance from partner
as several transactions were pushed back.
Altiris also was downgraded by Deutsche Securities to hold from buy, as well as by CE Unterberg Towbin to market perform from buy. The stock fell $1.84, or 12.4%, to $13.01.
fell despite news that the Food and Drug Administration approved further trials of cancer drug Tocosol Paclitaxel. Sonus lost 15 cents, or 4.2%, at $3.39, having spent most of Friday's session in positive territory.
was higher by 4.3% after Goldman Sachs upgraded the semiconductor maker to outperform from in line. The stock added 68 cents to $16.52, helping the Philadelphia semiconductor sector index add 2.5%.
Morgan Stanley cut its rating for
to underweight from equal weight, setting a stock-price target of $36. The downgrade comes one day after the restaurant franchise reported a 4.6% decline in second-quarter same-store sales. Wendy's was up 50 cents, or 1.1%, to close at $47.45.
Other stocks seeing action Friday included
, which added 1.7% to $66.31;
, down 1.3% to $48.36;
Sirius Satellite Radio
, which gained 5.1% to $6.98; and
, up 6.1% to close at $33.89.
European markets rebounded after losing about 2% across the board Thursday. In London, the FTSE 100 added 1.4% to 5232, while in Germany, the Xetra DAX gained 1.5% to 4597. Japan's Nikkei fell 0.1% overnight to 11,590, while Hong Kong's Hang Seng lost 0.8% to 14,031.
"Bears had to be very disappointed in the market comeback yesterday, but must remember that a bull market loses momentum slowly," said Ken Tower, chief market strategist with CyberTrader.
Also in economic news, the Commerce Department said May wholesale inventories rose 0.1%. Economists expected to see a 0.5% rise after a 0.8% increase in April. Wholesale sales were unchanged at $295.5 billion.
To view Colin Barr's video take on today's market, click here