Dow crosses 15,000 on better job numbers
NEW YORK A big gain in the job market is lifting the stock market to a record high.
The Dow Jones industrial average crossed 15,000 for the first time, and the Standard and Poor's 500 index, a broader market measure, rose above 1,600. In the first hour of trading Friday, the Dow Jones industrial average jumped 173 points to 15,004, a gain of 1.2 percent.
The S&P 500 index surged 20 points, or 1.3 percent, to 1,618. It has been thirteen years since the broad stock-market index broke through 1,500.
The Nasdaq composite rose 47 points, or 1.4 percent, to 3,387.
The government said U.S. employers added 165,000 jobs in April, more than economists were expecting. It also said more jobs were created in February and March than it had estimated earlier.
The unemployment rate also fell to 7.5 percent, the lowest in four years, from 7.6 percent the month before.
A series of weak manufacturing reports, disappointing retail sales in March, signs of an economic slowdown in China and mixed earnings reports for the first quarter have rattled the market in recent weeks. Friday's jobs numbers are reassuring investors.
The S&P 500 is up 13 percent from the start of the year. The Dow is up 14 percent.
When the jobs numbers were announced at 8:30 a.m. Eastern Daylight Time, gold dropped, oil rose and the dollar strengthened against the yen.
The yield on the benchmark 10-year Treasury note rose sharply as traders moved money out of bonds and into riskier assets like stocks. The yield rose to 1.72 percent from 1.63 percent the day before, its lowest level of the year.
Still, the market's performance still has many doubters.
"We are not convinced equities will continue to prosper in the second half of this year if the labour market continues to strengthen," wrote Capital Economics senior markets economist John Higgins in a note this morning. "Admittedly, the drop in the unemployment rate alongside a healthy increase in non-farm payrolls will have soothed fears of another spring slowdown... But the healthier the economy becomes, the more inclined the Fed will be to trim its asset purchases. This poses a threat to a stock market that has undoubtedly been supported by quantitative easing."
IHS Global Insight US Economist Paul Edelstein noted that other economic reports, including one key measure released today, are not so rosy.
"The ISM Non-Manufacturing Index slipped a little more than expected to 53.1," he wrote. "This signals ongoing but slower growth in non-manufacturing industries.
"Economic indicators are sending mixed messages," he wrote. "The ISMs are pointing to softer growth and another 'spring swoon.' Official labor market indicators, including unemployment claims and payrolls, suggest that the recent trend is largely intact. We ultimately expect a sequester-related softening in the spring and summer."