May 4, 2013 in Business

Stocks soar on solid jobs report

Bernard Condon Associated Press
 

NEW YORK – Optimism about the economy swept through the stock market Friday.

After weeks of mixed signals about manufacturing and earnings, a surprisingly strong U.S. jobs report gave investors confidence that the economy isn’t about to falter. The market jumped from the opening bell. A wave of buying helped the Standard and Poor’s 500 index crack the 1,600 mark for the first time. The Dow Jones industrial average broke through 15,000.

“There’s euphoria today,” said Stephen Carl, the head equity trader at The Williams Capital Group. “That’s what you’d have to call it.”

Jobs are crucial to keeping the stock market climbing. Big U.S. companies are making record profits, but much of that has come from cutting costs, not boosting sales. More jobs, and more consumer spending, would help.

U.S. employers added 165,000 workers last month and many more in February and March than previously estimated. The unemployment rate fell to the lowest level in four years, 7.5 percent.

“We’re breaking through psychological barriers and that will continue to bring investors off the sidelines,” said Darrell Cronk, regional chief investment officer for Wells Fargo Private Bank. He called the jobs news “wonderful.”

On Friday, markets’ gains were broad. Eight of the 10 industry groups in the S&P 500 index rose. Nearly three stocks rose for every one that fell on the NYSE.

Companies that stand to benefit most from an upturn in the economy led the market. Those that make basic materials and produce oil and gas rose the most in the S&P 500 index.

U.S. Steel rose $1.08, or 6.3 percent, to $18.14. General Electric rose 25 cents, or 1.1 percent, to $22.57. Dow Chemical rose 84 cents, or 2.5 percent, to $33.96.

Utilities, consumer-staple companies and other safe-play stocks trailed the market as investors took on more risk.

The S&P 500 is up 13 percent from the start of the year. The Dow is up 14 percent.

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