Star-Bulletin news services
Indexes recovering
from March bluesThe positive jobs data released
last week has helped the markets
NEW YORK >> Investors' growing optimism carried Wall Street's rally into a new week yesterday, with stocks gathering momentum and surging higher late in the session despite an absence of market-moving news.
Many investors opted for blue chips and tech stocks over small-caps, although the latter rallied with the rest of the market by day's end. Interest rate-sensitive sectors, including banking and construction, fell on fears that last week's strong employment figures could signal sooner-than-expected rate hikes from the Federal Reserve.
Despite those concerns, the major indexes continued to recover from March's correction. The Dow Jones industrial average gained 87.78, or 0.8 percent, to 10,558.37, after rising 2.5 percent last week. The index last closed above that level on March 5.
Broader stock indicators also advanced. The Standard & Poor's 500 index rose 8.76, or 0.8 percent, to 1,150.57, also its best close since March 5. The gain followed a 3.1 percent rise last week.
The Nasdaq composite index was up 21.95, or 1.1 percent, at 2,079.12, its highest level since Feb. 17. Last week, the Nasdaq climbed 5 percent.
The price of the Treasury's 10-year note closed down 1732 point, while its yield rose to 4.21 percent from 4.12 percent Friday. Two-year Treasury notes fell 116 point and yielded 1.88 percent, up from 1.85 percent Friday.
There was no major news to influence trading, but that didn't matter to investors. Wall Street was coming off its best week of 2004, fueled by government reports that showed the economy created 308,000 jobs in March. The reading helped the markets move back into positive territory for the year.
"The jobs data last Friday has provided the missing ingredient that many people have been looking for over the last several months," said Michael Sheldon, chief market strategist at Spencer Clarke LLC. "We might be a little oversold in the short term, but I think investors are encouraged by the bounceback in the markets over the past few weeks."
Some investors remained concerned that if job growth remains at such a high level, that could spur the Fed to raise interest rates earlier than expected to ensure that the recovery doesn't fall victim to inflation.
"It's not a question of when the Fed will raise rates -- of course they are," said John Caldwell, chief investment strategist for KeyBanc Capital Markets Financial Group. "The more important question is, should they be raising rates sooner rather than later? The longer they wait, they more they may feel they have to act more aggressively."
Investors were generally upbeat about earnings season, expected to start today.
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