Strong job growth spurs buying

A gratifying May employment report and Intel Corp.’s strong mid-quarter update gave Wall Street a moderate advance Friday, with falling oil prices padding the market’s gain. But the tech-heavy Nasdaq, buffeted by the previous session’s volatility, still posted a loss for the week.

The government’s latest payroll figures pointed to continuing strength in job creation — a key piece of the economic recovery that had been lagging coming into 2004. With more than 1 million new jobs in the last three months alone, investors were assured of the economy’s ability to continue growing. But while the latest figure was not as high as in previous months, analysts said that wasn’t a bad sign, since faster growth could trigger faster interest rate hikes.

“This is a very Goldilocks number — not too hot or too cold. It was just what we needed,” said Chris Wolfe, global head of equities for J.P. Morgan Private Bank. “It lets us contend with the other issues in June with a fairly strong economy behind us.”

Those other issues include a likely interest rate hike by the Federal Reserve at the end of the month and the transition of power in Iraq on June 30, Wolfe said.

The Dow Jones industrial average gained 46.91, or 0.5 percent, to 10,242.82. The index had been more than 100 points higher earlier in the session.

Broader stock indicators also advanced. The Standard & Poor’s 500 index was up 5.86, or 0.5 percent, at 1,122.50, and the Nasdaq composite index rose 18.36, or 0.9 percent, to 1,978.62.

For the week, the Nasdaq lost 0.4 percent, while the Dow rose 0.5 percent and the S&P 500 was up 0.2 percent. It was the second straight up week for the Dow and S&P 500, while the Nasdaq had its first weekly loss after two weeks of gains.

According to the Labor Department, the economy added 248,000 jobs in May, and the unemployment rate held steady at 5.6 percent. Payroll figures from March and April — already impressive — were revised upward as well.

Advancing issues outnumbered decliners by about 5 to 2 on the New York Stock Exchange, where volume came to 1.11 billion shares, compared with 1.23 billion at the same point Thursday.

The Russell 2000 index of smaller companies gained 5.31, or 0.9 percent, to 567.75.

Overseas, Japan’s Nikkei stock average rose 0.9 percent. In Europe, Britain’s FTSE 100 closed up 0.4 percent, France’s CAC-40 was up 1.2 percent for the session and Germany’s DAX index rose 1.1 percent.