Stocks rebound on
positive jobs data

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By Brad Foss
Associated Press

NEW YORK >> Stocks rebounded today after a report on the nation's unemployment showed unexpected improvement, and Intel predicted third-quarter chip sales would fall less than analysts had anticipated.

The Dow Jones industrials erased a sharp decline yesterday attributed to bad economic news, including sluggish productivity growth and disappointing retail sales.

"The situation overall, while not terrific, is better than some had feared," said Brian Bush, director of equity research at Stephens Inc.

The Dow closed up 143.50 points, or 1.7 percent, to 8,427.20 after dropping 141 points on yesterday.

The broader market also moved higher. The Nasdaq composite index rose 44.29 points, or 3.5 percent, to 1,295.29. The Standard & Poor's 500 index gained 14.77 points, or 1.7 percent, to 893.92. The Russell 2000 index gained 10.51 points, or 2.8 percent, to 391.57.

The price of the Treasury's 10-year note was down 25/32 point today, while its yield rose to 4.02 percent from 3.92 percent late yesterday. Two-year Treasury notes were down 3/16 point and yielded 2.05 percent, up from 1.95 percent yesterday.

The nation's unemployment rate fell to 5.7 percent in August and companies added 39,000 new jobs, the fourth consecutive monthly increase. Analysts had expected the rate to stay at 5.9 percent or edge up slightly for August.

Stock prices rallied during the first three weeks of August, but have largely fallen back since then.

With consumer confidence still fragile and businesses cautious about capital spending, analysts said the market remains susceptible to further declines. It will take a string of positive news, they said, for stock prices to move steadily higher.

For the time being, "it's going to be a very bumpy ride," said Brian Bruce, director of global investments at PanAgora Asset Management.

Low interest rates have helped sustain the housing and automobile markets, but retailers and airlines continue to suffer. With so much conflicting data, Bruce said investors are likely to take their cues on any given day from the latest economic indicator or headline-grabbing news.

Shares of Intel closed up $1.09, or 7.2 percent, to $16.20 after the chip maker lowered its third-quarter sales estimates late yesterday, but not by as much as Wall Street had feared.

Shares of Advanced Micro Devices, a rival, gained a penny to $8.

Overseas, Japan's Nikkei stock average finished down 1 percent. In afternoon trading in Europe, Germany's DAX index was up 3.3 percent, France's CAC-40 rose 3.4 percent and Britain's FTSE 100 gained 2.4 percent.