Stocks finished Friday's session with smart gains, with the Dow industrials reaching levels not seen in about three years as several economic reports appeared to confirm the U.S. economy is expanding at a healthy pace.
The Dow Jones industrial average rose 107.52 points, or 0.99%, to 10,940.55. The broader Standard & Poor's 500 index added 11.65 points, or 0.96%, to 1,222/12. The Nasdaq composite index gained 12.20 points, or 0.59%, moving to 2,070.61.
Looking ahead to next week, grocery store chain Kroger (KR) is expected to report quarterly earnings on Tuesday. Results from chipmaker National Semiconductor (NSM) and book retailer Borders (BGP) are due out on Thursday.
On the economic front, most of the key reports come out in the second half of next week, including a report on wholesale sales. Meantime, the January trade balance is expected to show a deficit of $57.8 billion in January vs. a $56.4 billion deficit in the previous month.
The catalyst for Friday's rally was U.S. nonfarm payrolls, which rose a net 260,000 in February. January's gain was revised to 132,000 from 146,000. A rise of roughly 240,000 to 250,000 was expected by the market. Still, the jobless rate rose to 5.4% vs a prior 5.2%. Meantime, average hourly earnings were flat, following a 0.3% rise (revised from 0.2%).
The University of Michigan consumer sentiment gauge held at 94.1 for all February, vs a mid-month reading of 94.2. It had been seen ticking up to 94.4 in February from 94.2 in January.
Factory orders came in up 0.2%, vs. expectations of a flat showing. Orders for big ticket items were revised to 11.3% from a previously released -0.9%. Inventories rose a whopping 1.3% in January, another early first quarter lift to GDP, says Informa Global Markets.
In stocks news, PC maker Dell (DELL) said it would buy back $10 billion worth of its shares.
Department store owner Saks (SKS) said its earnings rose nearly 18% as it suffered fewer one-time charges. But the company also said it found improper vendor markdown allowances.
Drugs news kept stocks from climbing even higher. A second patient was disclosed to be suffering from a frequently fatal infection after receiving a multiple sclerosis drug made by Biogen Idec (BIIB) and Elan (ELN).
But drugs and consumer products group Johnson & Johnson (JNJ) said it would buy Closure Medical (CLSR).
April crude futures prices settled around $53.65 per barrel after hitting a high for the day of $54.00. Friday's OPEC comments from Venezuela, U.S. weather forecasts calling for more cold weather, continued evidence OPEC is comfortable with current prices are keeping the market above $53 per barrel.
Treasuries closed higher in price Friday afternoon, though off the session's best levels. While a large number of jobs were added in February, the amount did not go far beyond consensus. But the Street is mostly focusing on the lack of uptick in the hourly earnings and the unemployment rate, which shot up 0.2%. So while the data suggest the Fed is still in the picture, prospects for aggressive rate hikes may have lessened. The yield on the 10-year Treasury fell to 4.32%.
European stock markets closed higher on Friday. In London, the Financial Times-Stock Exchange 100 was up 21.50 points, or 0.43%, to 5,036.30 as positive fiscal year 2004 results from Lloyds and Exel were countered by a spike in the oil price.
Germany's DAX index added 50.25 points, or 1.15%, to 4,423.52, shrugging off oil price concerns but lacking fresh stimulus to drive stocks with any great conviction.
In Paris, the CAC 40 index gained 30.23 points, or 0.74%, to 4,091.58, with Total, Schneider and Dexia providing support. On the whole, markets are nervous ahead of today's key February jobs report.
Asian markets closed mixed on Friday. Japan's Nikkei-225 index added 16.59 points, or 0.14%, to close at 11,873.05 as Tokyo shares continued to rise for the seventh consecutive trading day on Friday. Orient jumped after Nomura Securities initiated coverage of the consumer finance firm with a buy rating. Sumitomo Metal Mining surged after it said a new promising gold vein had been found at its mine.
In Hong Kong, the Hang Seng Index lost 161.59 points, or 1.16%, to 13,730.78 as Hang Lung Property tumbled 3% after the company posted a 206% year-over-year jump in first half 2005 net profit, in line with expectations.