Putting the finishing touches on its best four-week win streak since 1933, the Dow climbed above 8000 on Friday as traders weren't spooked by the latest bleak data that showed the U.S. unemployment rate surged in March to 25-year highs.
Today's Markets
The Dow Jones Industrial Average gained 39.51 points, or 0.50%, to 8017.59, the S&P 500 rose 8.12 points, or 0.97%, to 842.50 and the Nasdaq Composite picked up 19.24 points, or 1.20%, to 1621.87. The consumer-friendly FOX 50 added 4.61 points, or 0.73%, to 632.18.
Led by solid gains for financial stocks such as Morgan Stanley (MS) and a Research in Motion (RIMM) inspired tech rally, the markets proved once again to be resilient in the face of the latest dreary economic reports. The end result sent the Dow to its highest closing level since Feb. 9.
In addition to a new report showing the U.S. lost nearly 700,000 jobs in March, the markets withstood data indicating the U.S. service sector contracted further in March. Yet traders cheered the fact that the latest dreary numbers weren't significantly worse than Wall Street was already bracing for.
“It was more of a confirmation of consensus than it was a shot over the bow. And that was what the market wanted," said Peter Kenny, managing director at Knight Capital Group.
Friday's rally underscored how much Wall Street sentiment has improved in recent weeks amid beaten-down stock prices, new government actions and glimmers of hope emerging the housing and manufacturing sectors of the economy.
“It’s pretty shocking. At this point the bulls have control. They are taking any news and spinning it positively,” said Joe Saluzzi, co-manager of trading at Themis Trading in Chatham, N.J. “But I personally think the rally is bumping up against some serious resistance. People have to be careful. They are getting a little too bullish.”
It doesn't get much more bullish than the last four weeks on Wall Street. The Dow has surged more than 21% over that span, its best four-week win streak since soaring 31% in 1933.
“I think the market is really speaking to a degree of confidence in the overall number of projects, initiatives and coordination” taken by the government, said Kenny, citing the government's "five-headed" approach rather than any single program.
More than two-thirds of the Dow's 30 members closed in positive territory on Friday, led by financial giants Bank of America (BAC), Citigroup (C) and JPMorgan Chase (JPM). Drug makers Merck (MRK), Pfizer (PFE) and Johnson & Johnson (JNJ) took tumbles.
Boosted by Research in Motion's better-than-expectedquarterly results and outlook, the Nasdaq Composite rose more than 1%, pushing further into the green for 2009.
Markets Withstand Jobs Report
Faced with plunging profits amid the deepening recession, U.S. employers slashed 663,000 jobs in March, according to a new Labor Department report that nearly matched estimates from economists. The latest carnage on the labor front sent the unemployment rate from 8.1% to 8.5% -- the highest level in 25 years.
While the February unemployment figures were left unchanged -- a positive development for the markets -- the government now says employers slashed 741,000 jobs in January, the biggest drop since 1939. All told, the U.S. has lost 5.1 million jobs since the recession began in December 2007, with most of those job losses occurring in the past several months.
In the commodity markets, oil inched lower, ending 13 cents, or 0.25%, lower at $52.51 per barrel. Gold sank to two-week lows, falling $11.80 per ounce, or 1.3%, to $895.60.
Corporate Movers
Google (GOOG) is in talks to acquire micro-blogging service Twitter, according to TechCrunch. The search giant is reportedly considering paying in cash or stock or a combination of the two. The website also reported that Google and Twitter are in talks about developing a real-time search engine.
Bank of America's (BAC) board of directors signed off on $713 million in dividend payments to the U.S. government under its bailout plan.
Blockbuster (BBI) reached a deal to refinance a $250 million revolving credit facility as part of the retailer’s efforts to restructure its debt load. The move extends the term of the facility to Sept. 2010 and cuts the amount owed from $350 million. Blockbuster’s lenders will also waive any default stemming from a recent going concern notice.
Micron (MU) posted a worse-than-expected adjusted-loss of 82 cents per share as the chip maker’s revenue plunged 27%. Analysts had expected a loss of just 62 cents per share.
Data Dump
The Institute for Supply Management said its non-manufacturing index tumbled to a 40.8 reading in March, down from 41.6 the month before. Economists predicted U.S. service-sector activity would be flat from February. Either way, a sub-50 reading indicates continued contraction.
Global Markets
In Europe, London's FTSE 100 fell 2.31% to 4029.67 while Germany's DAX rose 0.07% to 4384.99 and the Paris' CAC 40 sank 1.11% to 2958.74.
In Asia, Japan's Nikkei 225 gained 0.34% to 8749.84 while Hong Kong's Hang Seng rose 0.16% to 14545.69. China's Shanghai Composite fell by 0.23% to 2419.78.
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