Dow rises 94.72,
nears record

NEW YORK — Stocks rallied into the close of a powerful week today, bolstered by news of a federal budget deal and more indications that inflationary pressures remain under control.

The Dow Jones industrial average rose 94.72, or 1.4 percent, to 7,071.20, pulling within 15 points of an all-time high. For the week, the Dow rose 332.33 points, or nearly 5 percent. The technology-rich Nasdaq market soared to its biggest point gain ever.

On the New York Stock Exchange, advancers led decliners by more than a 4-to-1 margin with 2,143 up, 509 down and 704 unchanged. NYSE volume was 499.73 million shares vs. 459.35 million yesterday.

The Standard & Poor's 500-stock list rose 14.44 to 812.97, and the NYSE composite index rose 7.26 to 422.97. The Nasdaq index rose 34.83 to 1,305.33, pulling back into positive territory for the year and back above 1,300 for the first time since mid-March.

The Russell 2000 list of smaller companies rose 8.32, or 2.4 percent, to 353.98. The American Stock Exchange composite index, which is also dominated by smaller companies, rose 10.00 to 568.50.

Although higher most of the day, the markets took off late in the session as word spread that President Clinton and Republican leaders had agreed on a plan to balance the budget while bestowing tax breaks on investors, as well as families and students.

Today's data on April employment initially drew a mixed reaction, but investors latched onto indications that job creation remained modest while wages fell.

The Labor Department reported that employers hired 142,000 new workers in April, continuing the prior month's sharp drop-off from 314,000 in February and 259,000 in January. The report also showed that average hourly earnings — a significant force behind inflation — fell a penny to $12.14.

But the report also revealed a stunning drop in the nation's unemployment rate to 4.9 percent in April, the lowest level since late 1973. The Labor Department also said factory overtime inched to the highest level since the government's began tracking that figure in 1956.

Economists have been worried that a strong job market will force companies to raise wages — and prices — as they compete for workers to meet demand.

In late March, the Federal Reserve moved to slow the economy by raising one of its key lending rates. That spurred a sharp selloff in stocks amid worries that a big slowdown in borrowing will hurt sales and raise corporate operating costs.

The Fed is widely expected to raise rates again in May, but investors are hoping it will be the last tightening move for a while.