Dow Rallies 128 Points on Jobs Report
The Dow Jones Industrial Average ($INDU) rose 128 points, or 1.2%, to close at 10,448. The blue-chip index gained nearly 3% on the week, breaking a three-week losing streak that saw it close below 10,000 for the first time since early summer.
The broader S&P 500 ($INX) rose 14 points, or 1.3%, to end at 1,105, led by the financial sector, technology stocks and capital goods. The more volatile, tech-heavy Nasdaq Composite ($COMPX) added 34, or 1.5%, to finish at 2,234
Investors cheered the second surprisingly good reading on the state of the economy in as many days. The mother-of-all monthly releases -- the jobs report -- showed that the private sector added 67,000 jobs in August, the Labor Department said, or more than the 40,000 increase economists were expecting. True, the nation shed 54,000 jobs last month, but economists and the market were anticipating a number nearly twice that high.
Friday's encouraging jobs report follows yesterday's surprisingly strong reading on U.S. manufacturing by the Institute for Supply Management. The ISM'spurchasing managers index, a closely watched gauge of business activity, increased to 56.3 in August from 55.5 in July. Economists, on average, were looking for the index to fall to about 53. A reading above 50 means business activity is expanding.
Bonds prices continued to come under pressure on the better economic news, with yield on the benchmark 10-Year Treasury note leaping to 2.71% from 2.63% Thursday and 2.57% on Wednesday. (Bond prices move in the opposite direction of yields.)