Wall Street on track for stellar week on jobs data

Wall Street on track for stellar week on jobs data

New York: Investors pushed US stocks higher on Friday, heading for the best week since early 2009, on news the US unemployment rate fell to a 2-1/2 year low.

Recent US economic data has heartened investors. US companies stepped up hiring and the jobless rate dropped to 8.6% from 9%, further evidence the recovery was gaining momentum.

The unemployment rate drop was “the single most surprising number in employment data this year," said Nicholas Colas, chief market strategist at the ConvergEx Group in New York.

The lowest estimate on a poll by Reuters of 67 economists was 8.9%.

The S&P 500 came within striking distance of its 200-day moving average, an important technical level, and briefly turned positive for the year before paring gains to a 0.88% decline.

Financial shares were the biggest gainers on the day with the S&P financial index up 2.3%. JPMorgan Chase gained 8% to $32.90.

Traders are also setting up for next week’s European Central Bank meeting and a European Union summit, expected to shed light on the plans to combat the escalating borrowing costs in euro zone countries and tackle the debt crisis.

“There’s an increasing expectation that when leaders meet next week they will have the framework of a resolution that will allow greater fiscal unity and some beginnings of a resolution to the European debt crisis," Colas said.

He said traders were nonetheless cautious since expectations have been overblown before.

“We’ve been led down the aisle so many times we’re afraid the groom’s not going to show up again," he said.

The Dow Jones industrial average gained 30.61 points, or 0.25%, to 12,050.64. The Standard & Poor’s 500 rose 4.18 points, or 0.34%, to 1,248.76. The Nasdaq Composite added 8.39 points, or 0.32%, to 2,634.59.

The three major indexes were on track to post their largest weekly percentage advance since March 2009. Indexes had advanced more than 1% earlier in the day.

“If you had a good week, there’s a very strong temptation to take everything off of your portfolio and wait for the next drop down," Colas said.

US-listed shares of Research in Motion Ltd dropped 8.8% to $16.95 after the BlackBerry maker said it will record a pretax charge to write down the value of its poorly received PlayBook tablet computer.

Google Inc rose 1.4% to $622.04 after the Wall Street Journal reported the Internet group was considering a service to help consumers shop online with one-day delivery service to cut the loss of Web traffic to Amazon.com Inc.