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The Spokesman-Review Newspaper
Spokane, Washington  Est. May 19, 1883

Stocks flat, nearly back to ’09 start

Madlen Read And Sara Lepro Associated Press

NEW YORK – With unemployment still rising, investors are questioning if stocks should be, too.

Stocks ended a volatile day Friday little changed after the government reported a spike in the unemployment rate to 9.4 percent in May, the highest level in more than 25 years, even as the pace of layoffs eased more than expected.

The Dow Jones industrial average finished up almost 13 points at 8,763.13, just 14 points below where it started the year. The index had advanced as much as 89 points and moved in and out of positive territory for 2009 during the day, but the jump in the unemployment rate proved to be too tough to ignore.

“When nearly 10 percent of people are out of work, it’s hard for me to say things are so positive,” said Anthony Conroy, head trader for BNY ConvergEx Group.

The Dow closed the week up 262.80, or 3.1 percent, at 8,763.13. The Standard & Poor’s 500 index rose 20.95, or 2.3 percent, to 940.09. The Nasdaq composite index rose 75.09, or 4.2 percent, to 1,849.42.

The Russell 2000 index, which tracks the performance of small company stocks, rose 28.78, or 5.7 percent, for the week to 530.36.

Although the Dow is still 38.1 percent below its October 2007 high, it has charged ahead 33.9 percent since hitting a 12-year low in early March.

“The markets are feeling better even though the economy is still sick,” Conroy said.

Bond prices tumbled again, sending long-term yields to their highest levels this year. Those yields are closely tied to interest rates on mortgages and other kinds of consumer loans.

Investors track unemployment closely since jobless people are far more likely to default on their debts and slash their spending, potentially exacerbating two of the most troubled spots in the economy right now: consumer spending and the ailing financial industry.