Wall Street Rockets Higher in Best Week Since '09

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Stocks surged more than 7% this week, Wall Street's best performance since 2009, as traders grew hopeful that global policymakers are taking action to tackle Europe's two-year-old debt crisis.

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Today's Markets

The Dow Jones Industrial Average fell 0.61 point, or 0.01%, to 12,019, the S&P 500 slipped 0.3 point, or 0.02%, to 1,244 and the Nasdaq Composite gained 0.73 point, or 0.03%, to 2,627.

Action was fairly subdued on the day, with the major market averages making only small moves.  The S&P 500 leaped 7.4% on the week, its best performance since March 13, 2009, which is considered to be the beginning of the current bull market. The broad-market index has nearly doubled since hitting its bear-market low of 666.79 on March 6, 2009, but is still down by 1.1% for the year.

The Dow tacked on 788 points, or 7%, the second-biggest weekly point gain in the history of the blue-chip index, and the best percentage performance since July 2009.

The financial sector posted the best performance on Friday, with big-name investment banks like Morgan Stanley (NYSE:MS) and Goldman Sachs (NYSE:GS) leaping higher.  Indeed, JPMorgan Chase (NYSE:JPM) performed the best out of all of the Dow components by a wide margin. Hewlett-Packard (NYSE:HPQ) and Johnson & Johnson (NYSE:JNJ) by contrast, were the worst-performing blue chips.

On a broader level, the health care sector struggled the most, with the Health Care Select Sector SPDR (NYSE:XLV), an exchange-traded fund that tracks many healthcare names, falling by more than 1%.

U.S. Treasury yields made relatively modest moves on Friday.  The benchmark 10-year note yields 2.035% from 2.003%.

Jobs Report: A Mixed Bag

The Labor Department reported nonfarm payrolls rose by 120,000 in November, slightly less than the 122,000 economists had expected. The unemployment rate unexpectedly fell to 8.6% from 9%, hitting its lowest level since March 2009.

The private sector tacked on 140,000 jobs, while the government shed 20,000 in a trend that has been seen in recent reports. The unemployment rate is calculated by comparing the number of unemployed to those individuals in the workforce.  In November, 315,000 individuals left the workforce, which was a factor in pushing the unemployment rate lower.

More Progress on the European Front

French President Nicolas Sarkozy after the market closed on Thursday proposed tighter fiscal integration for euro zone countries, and for the creation of a European Monetary Fund, which would be able to aid ailing countries preemptively.  The proposed body would be able to make decisions based on a majority vote instead of a unanimous one, which would make the process of providing rescue aid much quicker. This move comes ahead of a summit next Friday in which market participants hope leaders will be able to reach a comprehensive solution on tackling the debt crisis.

The new head of the European Central Bank, Mario Draghi, also hinted on Thursday that the central bank may launch an action in European debt markets in exchange for countries taking stronger steps on reining in sovereign debt.  However, it is important to note that Draghi came short of actually proposing an explicit measures.

The ECB is also mulling making a $270 billion loan through the International Monetary Fund to aid European countries in need, according to a report by Bloomberg News.  Officials at the ECB did not immediately respond to requests for comment on the matter.

European blue chips jumped 1.2%, while the euro sunk 0.42% to $1.341.

Energy markets were higher.  The benchmark crude oil contract traded in New York gained 76 cents, or 0.76%, to $100.96 a barrel.  Wholesale RBOB gasoline jumped 6 cents, or 2.3%, to $2.62 a gallon.

In metals, gold gained $11.50, or 0.66%, to $1,751 a troy ounce.

Foreign Markets

European blue chips jumped 1.2%, the English FTSE 100 rallied 1.2% to 5,552 and the German DAX climbed 0.74% to 6,0881.

In Asia, the Japanese Nikkei 225 edged higher by 0.54% to 8,644 and the Chinese Hang Seng rose 0.2% to 19,040.

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