Dow Rallies On Strong Jobs Report

Relief that the U.S. economy continues to crank out jobs at a brisk clip sent stocks soaring higher Friday as the market capped its worst week in three months.

The Dow Jones industrial average advanced 136.46 points, or 1.5 percent, to 9,016.14.

On the week, the Dow forfeited 316.94 points, or 3.4 percent. It was the gauge's worst week since the period ending Sept. 4.

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"These figures are good news on a couple of fronts," said Irwin Kellner, chief economist at CBS MarketWatch and Weller Professor of Economics at Hofstra University. "The labor market is strong and that means people have not only money but confidence and they'll be spending in this key holiday shopping season. In turn, this means the economy will end up the year in pretty good shape.

"The other piece of good news is that labor is not taking advantage of this strong labor market by pressing for big pay increases, since average hourly earnings only went up 0.2 percent," Kellner added.

"This means that we've really got the best of both worlds. We've got growth and no inflation pressures."

On the year, the Dow is up 1,107.89 points, or 14.0 percent, following gains of 33 percent, 26 percent, and 22 percent, in 1995, 1996, and 1997, respectively.

"The market pullback that we've seen since last week is very normal," said Alfred E. Goldman, director of technical market analysis at A.G. Edwards & Sons Inc. "In eight weeks, the Dow went up 24 percent. And then a week ago Wednesday, we struck a very normal pause to refresh.

"One of the best ways to test the mettle of the market is to see how it acts when you get into a price correction," Goldman continued. "And so far, the correction has proceeded in a vergentle fashion. We went up 1900 points and we've given back 500. I look for a bit more of this correction/consolidation and then a good year-end rally."

The advance was centered firmly on larger, blue-chip issues, with the broader market lagging popular market averages considerably.

Leading the parade, however, was the technology sector, as investors bought computer hardware, semiconductor and Internet stocks.

The coming week will offer investors a respite from the packed economic docket that characterized the past week. The sole reports of significance are the November retail sales and wholesale inflation releases due Friday. Otherwise, more companies are expected to trot out previews of their fourth-quarter earnings reports.

"What I think you'll see is a continued rally, but a much more erratic rally, over the next six weeks or so," said Richard Dickson, technical analyst at Scott & Stringfellow Inc. "At the end of next week, I think you'll see the market at a higher level than where we started this week. But there's going to be a lot of ups and down in between."

In Friday's market indicators:

• The Standard & Poor's 500 Index rose 2.3 percent.
• New York Stock Exchange winners dusted losers by 19 to 11.
• On the Big Board floor, turnover contracted 12 percent to 711 million shares.
• The Nasdaq Composite advanced 2.4 percent. Advancing issues led decliners by 7 to 6 in the Nasdaq Stock Market. Volume totaled 885 million shares.
• The Russell 2000 Index of small-company stocks gained 0.8 percent.
• In the bond market, the 30-year Treasury declined 20/32, to yield 5.043 percent.

• uBid (UBID) jumped 33 points, or 220 percent, to 48 in its market debut. The Internet auctioneer sold 1.58 million shares at $15 apiece.
• Elsewhere on the IPO frontier, Chinese restaurant operator P.F. Chang's China Bistro (PFCB) cooked up a 6 1/2-point gain, or 54 percent, to 18 1/2. It offered 4.15 million shares at $12 each.
• , Johnson & Johnson (JNJ) advanced 2 3/16 to 81 3/4. The company said after markets closed Thursday it will lay off 6 percent of its workforce, shutter 36 plants, and take a hit of $800 million against its fourth-quarter results in a restructuring bid.
• Lucent Technologies (LU) advanced 7 3/8 to 95 3/4. The telecommunications equipment bellwether served up positive comments on its outlook at a Credit Suisse First Boston technology conference in Arizona.
• Other telecom concerns connected for advances. Nokia was 6 points richer to 108 11/16, LM Ericsson 1 15/16 to 27 3/4, and Philips Electronics 2 15/16 to 67 3/4.
• Pairgain Technologies (PAIR) fell 2 1/32 to 7 8/256. The maker of telecommunications equipment gear warned that fourth-quarter revenues and operating profits would not meet most expectations, blaming the defection of Bell Atlantic, an important client. It also cited pricing pressres in the high-speed HDSL market segment.
• EMC (EMC) added 3 7/16 to 79. Stock of the data storage specialist responded to kind words from Morgan Stanley Dean Witter. The broker hiked its price objective to $100 a share from $75 and maintained its "outperform" rating on the shares. Merrill Lynch repeated its near-term "buy" recommendation.
• Ticketmaster Online-CitySearch put on another 2 13/16 to 43 1/16. The online provider of event ticketing and city guide services came public Thursday at $14 a share.
• Seventh Level (SEVL) added 3/8 to 3 1/2 after trading up as much as 1 15/16 intraday. It inked a distribution deal for its animated text-to-speech technology with Web site development concern GeoCities (GCTY).
• In technology, virtually every benchmark computer-related issue punched out a point-plus rise. Intel (INTC) picked up 6 13/16 to 116 5/16 after the semiconductor titan bumped up its estimate of fourth-quarter sequential revenue growth to between 8 percent and 10 percent from a range of 3 percent to 5 percent.
• Also, Microsoft rose 5 1/4 to 127 3/8, Dell Computer 2 1/8 to 66, Cisco Systems 2 1/16 to 78 1/4, Sun Microsystems 2 1/4 to 75 3/16, Compaq Computer 2 1/4 to 38 5/8, and Applied Materials 1 3/8 to 44 3/16.
• Web stocks gained broadly in the wake of uBid's triumphant IPO. Among portal issues, Yahoo! tacked on 6 3/8 to 190 1/8, America Online 4 1/8 to 87 3/4, and Lycos 3 13/16 to 54 5/16. In the electronic commerce segment, Books-A-Million improved 1 3/8, or 11 percent, to 13 5/8; and Digital River 2 3/8 to 20 1/2. But Creative Computers gave back 9 to 26 1/4.