Stocks rallied into the close Friday, as technology issues led the way after a brokerage upgrade of the semiconductor sector, and Federal Reserve Chairman Alan Greenspan gave calming words about the current account deficit, says Standard & Poor's. Traders appeared to brush aside weaker-than-expected January payroll numbers.
The Dow Jones industrial average finished Friday's session with a gain of 123.03 points, or 1.16%, to 10,716.13. The broader Standard & Poor's 500 index gained 13.14 points, or 1.10%, to 1,203.03. The Nasdaq composite index climbed 29.02 points, or 1.41%, to 2,086.66.
U.S. nonfarm payrolls rose 146,000 in January, well below market expectations and down from 157,000 in December. The unemployment rate, which was expected to hold at December's rate of 5.4%, fell to 5.2%.
The jobs report sent Treasury yields sharply lower on the belief it indicates that inflation is under control, and provided a positive backdrop for equities, says S&P MarketScope.
The final University of Michigan consumer sentiment number was revised slightly lower for January, to 95.5 from 95.8. This is down from 97.1 the month before. S&P MarketScope notes that theres was little reaction from stocks or bonds to the softer-than-expected report.
Oil prices were 30 cents higher Friday. Oil futures traded at $46.48 on the New York Mercantile Exchange.
Semiconductor shares were stronger Friday, with the Philadelphia Semiconductor index (SOX.X) jumping over 2% as Prudential raised its semiconductor sector weighting to favorable and upgraded its rating on industry heavyweight Texas Instruments (TXN).
Oil and gas-drilling stocks were also up, after Banc of America raised its rating on the sector.
Altria Group (MO) was up after a Federal appeals court ruled that the government could not seek racketeering charges against the company, which owns cigarette brands Marlboro, Virginia Slims, and Parliament.
In earnings news, media conglomerate Time Warner (TWX) posted fourth-quarter earnings of 24 cents per share, vs. 14 cents the year before.
Ryder System (R) announced fourth-quarter earnings of 82 cents vs. 61 cents last year, on an 11% revenue rise. The company reaffirmed both its first quarter and fiscal year 2005 guidances.
Maxtor (MXO) posted a 24 cents per share loss in the fourth quarter, on a 12% revenue decline from last year. The computer hardware maker said it expects to cut approximately 200 jobs this year in the U.S.
Cardinal Health (CAH) fell short of expectations in its second-quarter earnings announcement. The health care company posted earnings of 63 cents per share, vs. 84 cents last year. The company lowered its 2005 guidance.
Treasuries surged on the weaker-than-expected payrolls numbers and the downward revision to the Michigan sentiment number, despite the decline in unemployment figures. The 10-year note's yield finished at 4.08%.
The dollar gained strength after Fed Chairman Alan Greenspan made a statement that market forces and likely budget deficit cuts by the U.S. administration "appear poised" to lower the current trade deficit. The euro traded at $1.287.
European stock markets finished higher Friday. In London, the Financial Times-Stock Exchange 100 index rose 36.90 points, or 0.75%, to 4,945.20.
Germany's DAX index went up 57.64 points, or 1.35%, to 4,4339.28.
In Paris, the CAC 40 index gained 29.07 points, or 0.74%, moving to 3,958.01.
Asian markets finished mixed Friday. Japan's Nikkei average fell 28.95 points, or 0.25%, to close at 11,360.40.
Hong Kong's Hang Seng index rose 69.84, or 0.52%, to close at 13,585.17.