NEW YORK (AP) — Stocks rose in early trading Friday after a report showed improvement in the U.S. job market and Germany’s chancellor talked tough about fiscal discipline in the European Union.
The Dow Jones industrial average rose 78 points, or 0.7 percent, to 12,098 in the first half-hour of trading. The Standard & Poor’s 500 index rose 9, or 0.7 percent, to 1,253. The Nasdaq composite rose 19, or 0.7 percent, to 2,645.
The gains were broad. Bank stocks rose the most, followed by industrial companies. JPMorgan Chase & Co. rose 3.4 percent, the most among the 30 stocks in the Dow average. Only two Dow stocks fell, Hewlett-Packard Co. and Wal-Mart Stores Inc.
The government said the unemployment rate fell to 8.6 percent last month, its lowest level in 2½ years. Economists had expected the rate to stay at 9 percent. But a key reason the unemployment rate fell so much was because roughly 315,000 people had given up looking for work and were no longer counted as unemployed.
European stock indexes and the euro rose after German Chancellor Angela Merkel made a speech demanding tougher fiscal discipline in the region. Germany’s DAX index rose 1.1 percent; France’s CAC-40 rose 1.4 percent. Merkel said the 17 nations that use the euro must quickly restore market confidence by making financial controls stricter. Bond yields for Spain and Italy fell, a sign that investors are becoming more confident in the ability of those countries to pay their debt.
The improvements in the U.S. job market are “another illustration that the US economy is, for now at least, shrugging off the global economic downturn and fears about the collapse of the euro-zone,” Capital Economics Chief U.S. Economist Paul Ashworth said in a note to clients.
Merkel and French President Nicolas Sarkozy are meeting Monday to discuss treaty changes that can restore confidence in the euro’s future. The talks will culminate in a Dec. 9 summit of EU leaders, where the proposals are expected to be debated and detailed.
In corporate news:
— Big Lots Inc. slumped 7 percent, the most in the S&P 500 index, after the retailer reported a 76 percent plunge in income because of lower margins and a loss related to a newly acquired Canadian business. The company buys overstocked items including food and housewares and sells them at a discount.
— Western Digital Corp. soared 12.2 percent, the most in the S&P, after the data storage provider raised its revenue estimate for the current quarter and said that recovery efforts at its facility in Thailand following massive flooding there were proceeding faster than had been expected.