Stocks move higher after unemployment rate falls
The U.S. stock market moved higher in morning trading Friday after the government reported a decline in the unemployment rate last month. Several companies including Expedia rose sharply after reporting earnings gains. The market had its best day of the year the day before, but is still flat for the week.
The Dow Jones industrial average rose 52 points, or 0.3 percent, to 15,681 in the first 45 minutes of trading. The Standard & Poor's 500 index added nine points, or 0.5 percent, to 1,782. The Nasdaq composite gained 27 points, or 0.7 percent, to 4,084.
Online travel service Expedia soared
$8.81, or 14 percent, to $73.98 after reporting that its profit and revenue
jumped on increased hotel bookings and revenue from a new venture. LinkedIn
fell $19, or 9 percent, to $203 after the company said its performance may
falter this year as it spends more on long-term projects and revenue growth
slows. Fairway, a grocery store chain, plunged $3, or 28 percent, to $8.10
after it reported a loss in its fiscal third quarter and said its CEO is
stepping down.
The January jobs report showed that
employers added 113,000 jobs, less than the average monthly gain of 194,000 in
2013. This follows December's tepid increase of just 75,000. Job gains have
averaged only 154,000 the past three months, down from 201,000 in the preceding
three months.
Hopes of a good January report had
bolstered the Dow and the S&P 500 index, which each closed up 1.2 percent
on Thursday, their biggest gains since Dec. 18. Investors were looking ahead to
the January employment survey for clues as to the health of the U.S. economy.
Some investors were focusing more on
the drop in the jobless rate early Friday.
Tom di Galoma, head of fixed income
trading at ED&F Man Capital, said that despite the weakness in hiring, the
decline in the unemployment rate will allow the Federal Reserve to continue
winding down its bond-buying program.
The yield on the 10-year Treasury note edged down to 2.68 percent from 2.70 percent as investors moved money into bonds. It slid as low as 2.63 percent shortly after the jobs report came out at 8:30 a.m. Eastern time. The yield, which affects rates on mortgages and other consumer loans, had been edging higher after falling to 2.58 percent on Monday, the lowest level in more than two months.