Dow crosses 13,000 as dollar advances

By Madlen Read
Associated Press

NEW YORK » Wall Street shot higher yesterday as investors, while anticipating another dismal jobs report today, viewed the rising dollar and falling oil prices as promising signs for the economy. The Dow Jones industrial average soared nearly 190 points to close above 13,000 for the first time since Jan. 3.

The dollar jumped on better-than-expected economic data and the Federal Reserve's apparent resolve to monitor inflation. The Commerce Department said consumer spending rose 0.4 percent in March, more than predicted, and the Institute for Supply Management said U.S. manufacturing contracted in April by a bit less than anticipated.

The readings were not all positive - consumer spending ticked higher mainly due to rising energy and food prices. The ISM's report also indicated that companies are hurting from climbing costs.

But the dollar, which has recently strengthened after a protracted decline, rallied anyway, pushing the euro down more than 1 percent to $1.5461 in late trading. Trading was thin, with major currency markets in London and elsewhere closed for the May Day holiday, but the dollar's advance helped crude oil fall briefly near $110 a barrel and then settle at $112.52. That alleviated some of the inflation-related anxieties in the market, given that crude recently traded at a record near $120 a barrel.

"I don't know if it's all turned around, but I think oil got out of control," said Todd Leone, managing director of equity trading at Cowen & Co.

The Dow rose 189.87, or 1.48 percent, to 13,010.00, after briefly rising more than 200 points. It hadn't closed above 13,000 since Jan. 3, when it ended at 13,056.72; the Dow is still down 8.15 percent from its record close of 14,164.53, reached Oct. 9, 2007, before the brunt of the credit crisis hit Wall Street.

Broader stock indicators also enjoyed a significant advance yesterday. The Standard & Poor's 500 index rose 23.75, or 1.71 percent, to 1,409.34 - its first settlement above 1,400 since Jan. 14. The Nasdaq composite index climbed 67.91, or 2.81 percent, to 2,480.71, its highest close since Jan. 10.

The Russell 2000 index of smaller companies rose 13.57, or 1.89 percent, to 729.75.

Advancing issues more than doubled decliners on the New York Stock Exchange. Consolidated volume amounted to 4.32 billion, up from 3.66 billion shares traded Wednesday.

Bond prices fell. The yield on the benchmark 10-year Treasury note, which moves opposite its price, rose to 3.77 percent by late trading from 3.73 percent late Wednesday.

As the dollar moved higher against other currencies, gold prices dropped.

Investors are predicting another gloomy reading on U.S. employment today. The Labor Department's report is expected to show a 75,000 net loss in jobs for April - which would be the fourth straight month of losses - and a rise in unemployment to 5.2 percent from 5.1 percent in March. In a negative sign ahead of that data, the government said yesterday the number of newly laid off workers filing claims for unemployment benefits increased by a greater-than-expected 35,000 last week.

Shares of Exxon Mobil Corp., one of the 30 Dow components, declined $3.37, or 3.6 percent, to $89.70, after it said its first-quarter profit rose 17 percent to $11 billion - not as high as analysts expected, despite record-high oil prices. Lower production volumes caused the company's profit margins to shrink.

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