Stronger job numbers drive stock surge
Specialists Mario Picone, left, and Robert Nelson, center, work at their posts on the floor of the New York Stock Exchange on Aug. 3, 2012. / AP Photo/Richard Drew
(AP) NEW YORK - Like rain after a long drought, the stock market surged Friday after four days of losses as the government reported a sharp pickup in hiring by U.S. employers in July.
The Dow Jones industrial average rose 217 points to close at 13,096. The broader Standard & Poor's 500 index rose 26 points to 1,391, and the Nasdaq composite added 58 points to 2,968.
Markets had been slumping all week after central banks in the U.S and Europe took no new action to shore up the economy, as investors had hoped.
The Labor Department's closely watched monthly jobs report gave investors assurance that the U.S. economy may be doing better all on its own.
U.S. employers added 163,000 jobs last month, the government reported, a sharp turnaround following months of sluggish hiring. Between April and June, the economy added an average of just 75,000 jobs a month compared with 226,000 jobs per month in the first three months of the year.
"It's one step forward," said Joe Bell, senior equity analyst at Schaeffer's Investment Research. "But we would like to see continued improvement in the labor market in coming months."
There was also some good news from the service sector, a broad part of the economy that includes financial services such as banking, retail, health care and utilities.
The Institute for Supply Management reported that U.S. service companies grew at a slightly faster pace in July, with a reading of 52.6. Any reading above 50 indicates expansion.
The benchmark 10-year Treasury note was yielding 1.55 percent, up from 1.48 percent on Thursday. Bond yields rise when investors move money out of low-risk assets like U.S. government debt.
Oil prices also rose as investors became more optimistic about the economy following the jump in hiring by U.S. employers. Benchmark crude shot up $2.76 to $89.96 on the New York Mercantile Exchange.
Despite the gain in hiring, there were still enough signs of weakness in the latest jobs report to keep hope alive that the Federal Reserve may still take more steps to kick-start the economy at its next meeting in September. A separate survey of households by the Labor Department found that the unemployment rate rose to 8.3 percent in July from 8.2 percent in June.
At the end of a two-day policy meeting this week, the Fed said it would take action on the economy "as needed to promote a stronger economic recovery." Also on Thursday, the European Central Bank dampened investors' mood when it didn't provide details on how it plans to tackle the continent's debt crisis.
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