Dow soars 268.68
on strong jobs report

Markets also rally in Japan amid hopes
that the economy has begun to recover

NEW YORK -- U.S. stocks roared to record heights today, as a favorable employment report helped the market follow earlier rallies in Europe and Asia.

The Dow Jones industrial average rose 268.68 points, or 2.84 percent, to close at 9,736.08. It was the first move above 9,700 and easily beat the blue-chip stock index's previous closing high of 9,643.32, set Jan. 8. Broad-market indicators also posted substantial gains.

The Dow's advance brought its two-day gain to 460 points. Yesterday, the Dow rose 191.52 points.

Today's rally was fueled by a Labor Department report that showed the jobless rate edged up slightly to 4.4 percent in February. Yet the overall employment picture remained strong, indicating an economy that is continuing to post solid growth with no inflation. The report also boosted the inflation-sensitive bond market.

The unemployment report conveyed that the U.S. economy continues to expand without any inflationary threats. With such data in hand, investors believe the Federal Reserve will have little reason to raise interest rates in the coming months.

"This is a sign that the economy is truly not overheating," said Brian G. Belski, chief investment strategist at George K. Baum & Co. in Kansas City, Mo. "If the economy isn't running on all cylinders, nothing should happen with interest rates."

Japanese markets set the early tone for a robust trading day. Tokyo stocks posted their strongest gains this year, rising 5 percent. In Hong Kong, the Hang Seng Index rose 3.3 percent to a six-week high. Singapore's main index rose 1.1 percent.

The rally continued in European trading today. In London, the Financial Times-Stock Exchange 100 index rose 104.1 points, or 1.7 percent, to close at 6,205.5. The main market indicators rose 2.5 percent in Frankfurt and Paris and 3.5 percent in Milan.

In Japan, which is suffering its worst recession in decades, investors also benefited from some good news. The benchmark 225-issue Nikkei Stock Average climbed 710.55 points, closing at 14,894.00 points. It was the highest closing level since Dec. 9 and the Nikkei's best single-day session since Oct. 7.

"The investment environment was ideal," said Kazunori Jinnai, a manager at Daiwa Securities.

Traders said some foreign investors feel that Japan's economy may have bottomed out and could be headed for a slow recovery.

In U.S. markets, bonds posted their biggest gain in five months today, fueled by the positive U.S. unemployment report.

"The inflation picture is still very positive," and that's good for Treasuries, said Jeff Brothers, a trader at Bradford & Marzec Inc. in Los Angeles. Tame inflation allows bonds' fixed payments to hold more of their value. The 30-year Treasury rose 13/8 points, or $13.75 per $1,000 bond, to 95, pushing the yield down to 5.60 percent from 5.69 late yesterday. It was the biggest rally since Oct. 5, when yields fell to a 31-year low of 4.69 percent.

On Wall Street, the Standard & Poor's 500 rose 28.83, or 2.3 percent, to close at 1,275.47, and the technology-heavy Nasdaq composite index rose 44.22, or 1.9 percent, at 2,337.11.

Advancers beat decliners by an 11-to-5 margin on the New York Stock Exchange, with 2,065 up, 915 down and 560 unchanged. NYSE volume totaled 834.27 million shares vs. 774.82 million yesterday

The NYSE composite index rose 12.39 at 603.14, and the American Stock Exchange index gained 8.89 at 707.41. The Russell 2000 index rose 3.99 at 398.01.

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Bloomberg News and the Associated Press
contributed to this report.