March 11, 2006 in Business

Dow jumps 104 points on job report

Associated Press The Spokesman-Review
 

Currency rates

U.S.Foreign
Britain1.7263.5793
Canada.86151.1607
Euro1.1911.8396
Japan.008404118.99
Mexico.09344010.7020

Broad-based gains in employment sent stocks higher Friday, with the Dow Jones industrials gaining more than 104 points as investors regained some confidence in the economy. However, interest rate concerns remain, and the markets finished mixed for the week.

The 243,000 jobs created in February — spread throughout the service and industrial sectors — surpassed the 170,000 jobs created the previous month, according to the Labor Department. Average wages rose just 0.3 percent, and the unemployment rate rose to 4.8 percent from 4.7 percent in January.

The report was well balanced in addressing Wall Street’s concerns of late. The job increase points to continued economic growth, while the modest wage gains and slightly higher unemployment rate mollified fears of more workers creating higher demand for goods and possibly sparking inflation. Lower inflation could mean fewer interest rate hikes from the Federal Reserve. While keeping inflation in check, higher rates could stall economic growth.

“I think stock investors right now are looking at a Fed that might not go beyond March’s rate hike,” said Matthew Smith, vice president at Smith Affiliated Capital. “We’re seeing signs in this report that the economic growth engine isn’t going to continue steaming ahead. And that’s a good sign for rates.”

The Dow Jones industrial average, rose 104.06, or 0.95 percent, to 11,076.34.

Broader stock indicators also moved higher. The Standard & Poor’s 500 index added 9.35, or 0.73 percent, to 1,281.58, and the Nasdaq composite index gained 12.32, or 0.55 percent, to 2,262.04.

Bond prices headed lower, with the yield on the 10-year Treasury note rising to 4.76 percent from 4.72 percent late Thursday. The dollar was mixed against other major currencies, while gold prices rose.

Oil prices edged lower as traders digested the week’s news — higher U.S. energy stockpiles and steady production levels from major producers. A barrel of light crude settled at $59.96, down 51 cents, on the New York Mercantile Exchange.

For the week, the Dow rose 0.5 percent, while the S&P fell 0.44 percent and the Nasdaq tumbled 1.75 percent.

Advancing issues outnumbered decliners by more than 11 to 5 on the New York Stock Exchange, where volume came to 1.6 billion shares, compared with 1.56 billion traded on Thursday.

The Russell 2000 index of smaller companies rose 8.06, or 1.12 percent, to 726.34.

Overseas, Japan’s Nikkei stock average rose 0.49 percent. In Europe, Britain’s FTSE 100 was up 0.89 percent, France’s CAC-40 climbed 1.23 percent for the session, and Germany’s DAX index gained 1.27 percent.


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