Shares of homebuilders and mortgage lenders were at or near 52-week highs Friday morning, beneficiaries of a bond market rally that followed exceptionally weak employment data reported by the U.S. government.

Big banking gainers included Washington Mutual ( WM), Countrywide ( CFC), J.P. Morgan ( JPM) and Wells Fargo ( WFC).

The Amex Bank Index was recently up 0.7%.

Countrywide, whose shares were at $40 a year ago, was recently up $4.36, or 5%, to $97, a new 52-week high. The company has seen its business explode as homeowners repeatedly take advantage of lower interest rates to refinance mortgages. Still, the stock is relatively cheap compared with expected 2004 earnings of $10.39, reflecting investors continued skepticism about the durability of low interest rates.

That skepticism was being refuted in the bond market Friday, where the 10-year note was recently up 1 19/32, pushing the yield down to 3.82%. It was the bond's biggest gain since Oct. 31, 2001 and reflects traders' belief that Friday's employment report delays a Federal Reserve rate hike for the remainder of 2004.

Homebuilders were also surging, with Lennar ( LEN), Pulte ( PHM), Centex ( CTX), Hovnanian ( HOV) and Beazer ( BZH) all showing 3% to 4% gains in early trading.

The U.S. economy added just 21,000 jobs in February, well short of economists' forecasts, while the unemployment rate held steady at 5.6%. The Labor Department also said far fewer jobs were added in January and December than previously claimed.