A surprisingly good report on employment sent stocks sharply higher Friday.
The Labor Department said the unemployment rate fell to 8.8 percent, the lowest since March 2009, as companies added workers at the fastest two-month pace since before the recession began. Approximately 216,000 new jobs were added to the economy last month, offsetting layoffs in local governments. Economists had expected the unemployment rate to remain at 8.9 percent.
“We are clearly seeing a breakout in the labor market,” said Paul Zemsky, the head of asset allocation at ING Investment Management. “The jobless recovery is ending and we are moving into a job expansion stage of the economy.”
Stocks rose across the market. All 10 company groups that make up the S&P 500 index moved higher, led by a 1.1 percent rise in financial companies.
The Dow Jones industrial average rose 87, or 0.7 percent, to 12,406, a new high for 2011. The S&P 500 rose 10, or 0.8 percent, to 1,335. The Nasdaq composite rose 15, or 0.6 percent, to 2,796.
The Institute of Supply Management reported a slight slowing in manufacturing growth during March. The trade group’s index of manufacturing activity slipped to 61.2 from February’s 61.4. However, the drop was expected after manufacturing hit its highest level since May 2004 during February.
The Commerce Department delivered more bad, but also expected, news on the construction industry. The government said construction spending fell in February to its lowest level since 1999.
More economic numbers will come later Friday, when car companies release March sales figures.
Nasdaq OMX Group and IntercontinentalExchange said early Friday that they are making a bid for NYSE Euronext, offering what they say is a 19 percent premium to the deal the company struck with the operator of the German stock exchange.
The Dow finished Thursday with its best first-quarter performance since 1999, rising 6.4 percent in the first three months of the year. The stock market recovered from a volatile streak from mid-February through mid-March. The unrest in Libya and earthquake and tsunami in Japan shook investors, but improving U.S. economic reports pulled the market out of its slump.
Source: The Associated Press.