Stocks rise as the dollar weakens

NEW YORK – Stocks staged a late afternoon rally after spending most of the day weighed down by an unexpected rise in the unemployment rate. Indexes wound up closing higher for the third straight day.

The Dow Jones industrial average rose 2.6 percent for the week, its best weekly gain since hitting a 2010 high on Nov. 5. The Dow is now just 0.5 percent below that level.

Materials and energy companies led the rebound. Newmont Mining Corp. gained 3.1 percent and oil field services company Schlumberger Ltd. added 2.5 percent. The dollar fell 1.4 percent against an index of six other currencies. Oil and gold prices rose.

Michael Sheldon, chief market strategist at RDM Financial Group in Westport, Conn., said the relationship between a weaker dollar and stronger stocks followed a recent trend.

“You don’t see it every day, but it’s a clear inverse relationship: When the dollar goes down, stocks go up,” he said.

Industrial and basic materials companies that derive much of their revenue from overseas tend to rise when the dollar falls. That’s because their earnings from other countries are worth more in U.S. dollars when the dollar falls against other currencies.

The Dow Jones industrial average rose 19.68, or 0.2 percent, to close at 11,382.09.

The Standard & Poor’s 500 rose 3.18, or 0.3 percent, to 1,224.71. The Nasdaq composite index rose 12.11, or 0.5 percent, to 2,591.46.

Stocks spent most of the day in a slump. The Labor Department reported that the unemployment rate climbed to a seven-month high of 9.8 percent in November. Employers added just 39,000 jobs, far below what economists forecast.

Expectations of job growth had risen Wednesday after a report showed that private companies were hiring at the fastest pace in three years. That and strong reports Thursday on retail spending and home sales pushed the Dow Jones industrial average up 356 points in two days.