Stocks Rise on Jobs, Manufacturing Outlook

WALL STREET sign
AP
Stronger reports on jobs and manufacturing boosted stocks Thursday ahead of the government's employment report for March.

The Dow Jones industrial average gained 70 points or .65 percent, thanks in part to a late-session spike on the final day of a shortened week. Broader indexes were mixed. The stock market will be closed Friday and the bond market will close early for Good Friday.

The Nasdaq rose 5 points - .2 percent - and the S&P 500 was up 9 points or .75 percent.

Economists predict that the Labor Department will report employers added 190,000 jobs last month. That would mark on the second month of jobs growth since the recession began in December 2007. Government hiring for the 2010 census could give the job market a temporary boost. Still, an increase would be welcome news for stock investors.

"Just getting a number with six digits - over 100,000 - is I think very much encouraging to a lot of folks who really believe that none of this counts until we start creating jobs," said Jeffrey Kleintop, chief market strategist at LPL Financial in Boston.

Confidence grew Thursday after the Labor Department said Thursday that initial claims fell for unemployment benefits fell last week. A four-week average of clams dropped to its lowest level in 18 months.

Manufacturing figures also raised expectations that a recovery is gaining steam. A trade group's report signaled that U.S. manufacturing is growing faster than expected. Manufacturing reports from China and Europe also indicated that factories are busier.

The market has been climbing with little interruption for a year. In the past seven weeks, the gains have been marked by steady increases that are adding up. The Dow on Wednesday wrapped up its strongest first quarter since 1999.

A rise in the price of oil lifted energy stocks. Occidental Petroleum Corp. and Diamond Offshore Drilling Inc. rose 2 percent.

BlackBerry phone maker Research In Motion Ltd. fell 7 percent, dragging down other technology stocks, after the company's fiscal fourth-quarter shipments fell short of expectations.

In the final hour of trading, the Dow rose 35.75, or 0.3 percent, to 10,892.38. The Dow had been up 100 points, getting within 43 points of the psychological barrier of 11,000. The Dow hasn't topped that level it hasn't topped in 18 months.

The Standard & Poor's 500 index rose 4.78, or 0.4 percent, to 1,174.21. The technology-dominated Nasdaq composite index slipped 2.97, or 0.1 percent, to 2,394.99.

Bond prices fell, pushing yields higher. The yield on the benchmark 10-year Treasury note rose to 3.87 percent from 3.83 percent late Wednesday.

The dollar fell against other major currencies, while gold rose.

Crude oil rose $1.11 to $84.87 per barrel on the New York Mercantile Exchange.

The advance Thursday came after the government said initial jobless claims fell 6,000 to a seasonally adjusted 439,000 last week. Economists had forecast claims would drop to 440,000.

The four-week average of claims fell by nearly 7,000 to 447,250. That was the lowest level since mid-September 2008, just before the collapse of Lehman Brothers deepened the credit crisis.

Even though the stock market will be closed Friday, morning trading in Treasury bonds will provide insight into how investors are reacting to the monthly jobs report, which is the most closely watched piece of data on the economic calendar.

Meanwhile, the Institute for Supply Management said that its manufacturing index rose to 59.6 in March from 56.5 in February. Analysts polled by Thomson Reuters had expected 57. It was the fastest growth since July 2004.

Stocks fell Wednesday after payroll company ADP said private-sector employers cut jobs in March. Economists had predicted ADP's jobs report would show that employers added to payrolls.

The modest drop Wednesday did little to damage a strong first quarter. The Dow gained 4.1 percent, its best first-quarter performance since 1999. The S&P 500 rose 4.9 percent. That was its best first-quarter since 1998.

In other trading Thursday, the Russell 2000 index of smaller companies rose 2.27, or 0.3 percent, to 680.91.

Among stocks, Occidental rose $2.01, or 2.4 percent, to $86.55. Diamond Offshore Drilling rose $1.76, or 2 percent, to $90.57.

Research in Motion fell $5.25, or 7.1 percent, to $68.72.

Two stocks rose for every one that fell on the New York Stock Exchange, where volume came to a light 646.7 million shares, compared with 646.9 million shares traded at the same point Wednesday.

International markets rose after reports indicated growth in manufacturing in China and the 16-country bloc that uses the euro. A separate report found that corporate leaders in Japan are more confident about the business climate.

Britain's FTSE 100 rose 1.2 percent, Germany's DAX index gained 1.3 percent, and France's CAC-40 rose 1.5 percent. Japan's Nikkei stock average rose 1.4 percent.