Late Buying Lifts Dow Past 8000

Updated from 4:11 p.m. EDT

Stocks in New York had an erratic session Friday, but closed higher, as a late rally in the banks helped offset a jobs report that showed U.S. unemployment at the highest level in a quarter century.

The Dow Jones Industrial Average climbed 39.51 points, or 0.5%, to 8017.59, its first close above 8000 since Feb. 9. The S&P 500 gained 8.12 points, or 1%, to 842.50, and the Nasdaq added 19.24 points, or 1.2%, to 1621.87.

For the week, the Dow rose 3.1%, the S&P 500 added 3.3%, and the Nasdaq added tacked on 5%.

The financials rallied in the final hour of trading to lead the Dow, with Bank of America ( BAC) adding 5%. JPMorgan Chase ( JPM) and Citigroup ( C) rose 4% each.

Equities were initially weak after the U.S. government said that nonfarm payrolls decreased by another 663,000 in March and that the unemployment rate rose to 8.5% from 8.1%.

Job losses were widespread across the major industry sectors, according to the report from the Labor Department. Around 5.1 million jobs have now been lost since the recession began in December 2007, almost two-thirds of those in the last five months.

The number of people who have been jobless for 27 weeks or more, which is considered long-term, rose to 3.2 million. There were roughly 1.9 million long-term unemployed workers at the beginning of the recession. The numbers, which equate to the highest unemployment rate since 1983, were essentially in line with expectations.

"I think what we are looking for as a market is a deterioration of the rate of decline in the unemployment situation, a slowing of the acceleration," says Linda Duessel, equity market strategist at Federated Investors. "We need to see it moderating."

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