Wall Street shrugs off January job losses


POSTED: Saturday, February 07, 2009

NEW YORK » Investors have taken another big gamble on the government's plans to help the economy—hoping that this one will finally work.

All the major indexes rose more than 2 percent yesterday, including the Dow Jones industrial average, which rose more than 200 points as Wall Street looked past another bleak jobs report and awaited word from Washington about an economic stimulus plan and changes to the government's financial rescue program.

The advance helped propel the indexes to their first winning week after four straight weeks of losses, and put the Nasdaq composite in positive territory for the year to date.

The Labor Department said U.S. employers slashed 598,000 jobs in January, the most since late 1974. The unemployment rate rose to 7.6 percent, the highest since late 1992.

The Dow industrials rose 217.52, or 2.70 percent, to 8,280.59 after rising 106 on Thursday.

Broader stock indicators also jumped. The Standard & Poor's 500 index rose 22.75, or 2.69 percent, to 868.60, and the Nasdaq composite index rose 45.47, or 2.94 percent, to 1,591.71.

The day's gains have left the Nasdaq higher for the year; investors have been turning to the index's tech stocks on the belief they will help lead the market higher. The Nasdaq ended the week with a huge 7.81 percent gain, while the Dow was up 3.5 percent and the S&P 500 rose 5.17 percent.

The Russell 2000 index of smaller companies rose 15.62, or 3.43 percent, to 470.70. It rose 6.13 percent for the week.

Advancing issues outnumbered decliners by about 5 to 1 on the New York Stock Exchange, where consolidated volume came to 6.38 billion shares compared with 6.51 billion shares traded Thursday.

Bond prices were mixed yesterday. The yield on the benchmark 10-year Treasury note, which moves opposite its price, rose to 2.99 percent from 2.92 percent late Thursday. The yield on the three-month T-bill, considered one of the safest investments, rose to 0.27 percent from 0.26 percent.

The dollar was mostly higher against other major currencies. Gold prices edged higher.

Light, sweet crude fell $1 to $40.17 a barrel on the New York Mercantile Exchange.

Many of the yesterday's steepest gains occurred in hard-hit parts of the market like financials and retailers.

Financial stocks rose. Bank of America Corp. jumped $1.29, or 26.7 percent, to $6.13, while JPMorgan Chase & Co. rose $3.09, or 12.6 percent, to $27.63. Smaller banks also rose.

Fifth Third Bancorp rose 99 cents, or 60.4 percent, to $2.63. State Street Corp. advanced $2.95, or 10.7 percent, to $30.49.