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Capping off its best pre-Labor Day week in 20 years, the Dow thundered 128 points higher on Friday as the bulls cheered August’s less-awful-than-expected jobs report and waved off concerns stemming from a gloomy service-sector index.
The Dow Jones Industrial Average rose 127.83 points, or 1.24%, to 10447.93, the S&P 500 gained 14.41 points, or 1.32%, to 1104.51 and the Nasdaq Composite picked up 33.74 points, or 1.53%, to 2233.75. The FOX 50 added 9.03 points, or 1.15%, to 796.31.
The triple-digit finale to the stellar week left the markets in a rare four-day winning streak and the Dow at its highest level since August 11. This week's burst of buying has largely been sparked by new data on jobs, manufacturing and home sales that, while still weak, suggest fears of a double-dip recession may have been overblown.
“You’ve got to be happy. It’s been a great week,” NYSE trader Ted Weisberg of Seaport Securities told FOX Business, who noted the extremely light trading volume due to the holiday. “The markets tend to exaggerate up or down when there is a vacuum and no players -- but we’ll take it.”
However, Wall Street's jobs rally was nearly derailed by the Institute for Supply Management's report, which indicated growth in the U.S. service sector slowed down significantly in August, weighing on economically-sensitive crude oil.
Still, the markets bounced off their lows and closed near session highs, leaving the Dow with a 2.9% surge this week -- its strongest pre-Labor Day week since 1980. All 30 Dow stocks closed higher and the blue-chip index was led higher by Cisco Systems (NASDAQ:CSCO), Caterpillar (NYSE:CAT) and JPMorgan Chase (NYSE:JPM). Defensive plays McDonald's (NYSE:MCD) and AT&T (NYSE:T) lagged behind.
The Nasdaq Composite, which soared 3.7% this week, outperformed the broader markets again on Friday, gaining 1.5% as technology stocks like SanDisk (NASDAQ:SNDK) and Amazon.com (NASDAQ:AMZN) rallied.
U.S. markets began their ascent immediately after the Labor Department said the U.S. lost 54,000 jobs in August, beating forecasts from economists for a loss of 100,000 jobs. The government also said the U.S. added a stronger-than-expected 67,000 private-sector jobs last month, further boosting market sentiment. The unemployment rate ticked up 0.1 percentage points to 9.6% as job seekers reentered the labor markets. In another positive, government also sharply cut its job-loss estimate from July.
While Friday’s jobs report significantly beat consensus forecasts and Wall Street’s low expectations, it is important to remember the labor picture remains very gloomy. At the end of the day, fewer people held jobs in August than did in July and the fact the U.S. is still losing jobs at this point of the recovery is discouraging.
In contrast to this week’s stronger-than-expected reports, ISM said its non-manufacturing index slid from 54.3 in July to 51.6 last month, missing forecasts for 53.0. A reading above 50 indicates expansion. Digging into the report, the business activity and employment components stood at their lowest levels since January and the new orders components fell to December 2009 levels.
After initially rallying on the jobs report, crude oil closed lower, sinking 42 cents a barrel, or 0.56%, to $74.60. Copper gained 0.16% a pound to $3.4935. Gold dropped $2.30 a troy ounce, or 0.18%, to $1,249.20.
Goldcorp (NYSE:GG) unveiled a $3.4 billion cash-and-stock deal to scoop up Australia’s Andean Resources at a 35% premium to the miner’s closing price on Thursday. The move is aimed at bolstering Vancouver-based Goldcorp’s gold production pipeline and giving the company access to Andean’s principal asset, the 100%-owned Cerro Negro gold project, which is an advanced-stage, high-grade vein system located in Argentina.
UPS (NYSE:UPS) confirmed that one of its cargo planes crashed on takeoff in Dubai on Friday. Two crew members were onboard when the plane went down, the shipping giant said, but no casualties have been reported..
Take-Two Interactive (NASDAQ:TTWO) jumped 7.6% a day after the video-game publisher posted a surprise fiscal third-quarter adjusted-profit of 28 cents a share. Analysts had been bracing for a loss of 6 cents a share. Take-Two also sharply raised its fourth-quarter non-GAAP EPS outlook to 20 cents to 30 cents, which would blow away the Street’s estimate for a loss of 13 cents a share.
H&R Block (NYSE:HRB) beat the Street with a non-GAAP fiscal-first quarter loss of 36 cents a share, compared with forecasts for a loss of 41 cents a share. The tax preparer’s revenue of $274.5 million also topped estimates for $265.12 million.
Mariner Energy (NYSE:ME) rebounded from a Thursday selloff as there is no sign of oil in the wake of the fire on its Gulf platform. However, the Bureau of Ocean Energy Management, Regulation and Enforcement has opened an investigation into the incident.
Campbell Soup (NYSE:CPB) posted a stronger-than-expected 64% surge in fiscal fourth-quarter profits and EPS of 33 cents. Analysts had projected EPS of just 30 cents. However, revenue slid 1% to $1.52 billion, missing the Street’s view of $1.6 billion, and the soup maker’s fiscal 2011 sales growth outlook came in shy of its long-term targets.
The U.K.'s FTSE 100 rose 1.06% to 5428.15, France's CAC 40 jumped 1.12% to 3672.20 and Germany's DAX climbed 0.83% to 6134.62.
In Asia, Tokyo's Nikkei 225 advanced 0.57% to 9114.13, Hong Kong's Hang Seng gained 0.49% to 20971.50 and China's Shanghai Composite lost 0.01% to 2655.39.