By Kristina Peterson
U.S. stocks climbed Friday after slower job losses in August
encouraged investors still struggling to figure out the economy's
trajectory.
The Dow Jones Industrial Average rose 75 points, retreating from
its earlier triple-digit climb. The measure pared its gains after a
reading of service-sector data came in slightly weaker than
expected, denting enthusiasm over the government's monthly jobs
report.
"As far as the whole economy's concerned, it's still a debate
which way we're going," said David Bellantonio, head of U.S.
trading at Instinet. But he said the market was ready to embrace
any positive signs of growth in the labor market. "It was a
better-than-expected number for a market that was very cautious,"
he said.
Nonfarm payrolls fell 54,000 last month, matching the level of
revised losses recorded the previous month, the U.S. Labor
Department said Friday. Economists had predicted a drop of 110,000.
The unemployment rate, calculated using a separate household
survey, edged up to 9.6%, as expected, after holding at 9.5% for
previous two months. .
The Dow (DJI) rose 0.8% to 10404, led by a 2.2% rise in
Caterpillar (CAT). After a bruising August, the measure has already
climbed 2.4% this week, as traders have seized on brighter
manufacturing, housing and jobs data as signs that the economy may
still avoid a double-dip recession.
"It's very much become a binary risk-on, risk-off type of market
where you've had people that believe the recovery is going to fall
apart or the recovery stays intact," said Ed Crotty, chief
investment officer at Davidson Investment Advisors. In the wake of
encouraging jobs data, investors flooded into riskier
small-capitalization stocks. The Russell 2000 index (RUT) of
small-cap stocks surged 1.6%.
The Nasdaq Composite (RIXF) gained 1% to 2223. The Standard
& Poor's 500-share index (SPX) rose 0.9% to 1100, hovering near
the key 1100 level.
Traders said the private sector's addition of 67,000 jobs boded
well for the recovery's sustainability.
"It's really going to be the private sector that's got to kick
in for this to be sustainable," Crotty said.
Demand for safe-haven Treasurys slipped. The 10-year note fell,
pushing its yield up to 2.74%. The dollar weakened against the
euro, but strengthened against the yen. The euro was trading
recently at 1.2861, up from $1.2822 late Thursday in New York.
Crude-oil prices fell, and gold futures declined.
Asian markets gained, and the Stoxx Europe 600 index was up 1.2%
in early afternoon trading.
On the deals front, Goldcorp Inc. (GG) shed 3.2% on news that it
will acquire all outstanding shares of Andean Resources Ltd. for
$3.4 billion. Andean's principal asset is the Cerro Negro gold
project located in Argentina. .
Shares of Take-Two Interactive Software Inc. (TTWO) rallied 13%
after the company reported an unexpected quarterly profit and said
it expects a fiscal-year profit. .
Tax-preparation company H&R Block Inc. (HRB) climbed 8.5%
after reporting a smaller-than-expected loss from continuing
operations.
Campbell Soup Co. (CPB) slipped 2.4% after its fiscal
fourth-quarter earnings jumped 64% on prior-year write-downs, but
revenue at its soup business weakened.
This afternoon, Dennis Lockhart, president of the Federal
Reserve Bank of Atlanta, is scheduled to speak in Tennessee about
the economy.