Stock Market Hits 3-Year High

The Dow Jones industrial average and Standard & Poor's 500 indexes both reached 3-year highs Friday as investors sent stocks sharply higher on the strength of a surprisingly good job creation report. The Dow gained 107 points for the session, and all three major indexes posted gains for the week.

Wall Street was elated following the Labor Department's report that 262,000 jobs were created in February, far more than the 225,000 economists expected and the most in four months. Jobs were created throughout the economy, from retail to manufacturing.

Investors worried about inflation and higher interest rates found comfort in the report. The nation's unemployment rate ticked up to 5.4 percent, from 5.2 percent in January. And hourly earnings were surprisingly flat, which means workers' paychecks aren't growing and that businesses may have a hard time raising prices.

"It hit the sweet spot," said Jack Caffrey, equities strategist at J.P. Morgan Private Bank. "You got more people getting jobs, that's the important thing, and you have growth in wages, but not enough to raise fears of inflation. And that's really helping the market right now."

According to preliminary calculations, the Dow rose 107.52, or 1 percent, to 10,940.55, its best showing since closing at 10,948.38 on June 12, 2001.

Broader stock indicators also moved sharply higher. The S&P 500 was up 11.64, or 1 percent, at 1,222.11, the best closing level since the index finished at 1,234.45 on July 3, 2001.

The Nasdaq composite index continued to lag behind the other major indexes, but nonetheless gained 12.21, or 0.6 percent, to 2,070.61, its best close since Feb. 16.

By Michael J. Martinez