Market Shakes Off Jobs Report

Dow swings back up after early dip

Wall Street put an upbeat spin Friday on the government's report that the nation lost more than half a million jobs last month. Stocks reversed early losses and closed sharply higher as the data raised hopes that Washington will again step in to help the economy.

The Dow Jones industrial average traded in a 568-point range Friday as investors' shock dissipated over the Labor Department's report that employers slashed 533,000 jobs in November compared with the 320,00 that economists forecast. Ultimately, even a terrible reading on employment wasn't surprising to a market that has been drubbed by a stream of bad economic news.

The market's advance left Wall Street with moderate losses for the week. More important, investors were able to claim victory over the course of the week after having watched the market repeatedly overcome bleak economic data. The big exception was a 680-point drop in the Dow on Monday on fears the recession would deepen.

Friday's bounce-back was typical of what the market's recent behavior. Investors who originally sold after the employment figures had a change of heart by afternoon, believing the numbers could make the government more likely to supply more aid for the economy. They also appeared relieved by the market's relatively cool reaction to the data — trading was orderly and the huge loss of jobs didn't spark the type of massive sell-off it might have even a month ago when Wall Street still trying to determine how severe the recession would be.

"In a kind of paradoxical sense, the really ugly employment numbers probably helped the case for more help from Washington, whether it's through the broader stimulus plan or more targeted industry measures," said Craig Peckham, equity trading strategist at Jefferies & Co.

Job losses were widespread, hitting manufacturing, construction, retail, financial and other sectors.

Beyond the hopes for more aggressive moves by the government, strength in the tattered financial sector also gave a boost to the overall market Friday. An upbeat forecast from Hartford Financial Services Group Inc. cut through some of investors' fears that profits among financial firms would continue to spiral lower.

The company raised its profit expectations for the year and quelled some concerns about the strength of its balance sheet.

According to preliminary calculations, the Dow industrials jumped 259.18, or 3.09 percent, to 8,635.42 after falling by 258 and rising as much as 310 in the volatile trading late in the session.

Broader stock indicators also advanced. The Standard & Poor's 500 index rose 30.85, or 3.65 percent, to 876.07, and the Nasdaq composite index rose 63.75, or 4.41 percent, to 1,509.31.

The Russell 2000 index of smaller companies rose 21.56, or 4.91 percent, to 461.09.

Copyright AP - Associated Press
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