Merger News Outshines Job Losses To Cap a Rebound Week for Stocks
Saturday, February 2, 2008
NEW YORK, Feb. 1 -- Wall Street capped a week of big gains with another sizable advance Friday after investors set aside anxiety over news that the economy lost jobs last month and focused on Microsoft's bid for Yahoo and a possible rescue plan for the troubled bond insurance sector.
The Dow Jones industrial average rose 92.83, or 0.73 percent, to 12,743.19.
Broader stock indicators also moved higher. The Standard & Poor's 500-stock index rose 16.87, or 1.22 percent, to 1395.42, and the Nasdaq composite index advanced 23.50, or 0.98 percent, to 2413.36.
For the week, the Dow jumped 536.02 points, or 4.4 percent. The S&P 500 added 4.9 percent, and the Nasdaq rose 3.8 percent.
Stocks fluctuated Friday as investors weighed seemingly contradictory readings on the economy. Wall Street was pleased by Microsoft's bid. Merger news, which often energizes stocks, has been in short supply for months. But the mix of economic news reminded investors of the fallout from the housing and mortgage crisis.
The first blow came from the Labor Department's employment report for January. The economy lost 17,000 jobs, marking the first contraction of the labor market in more than four years. The news confounded economists, who were expecting 70,000 new jobs, according to Thomson/IFR. The unemployment rate fell to 4.9 percent from 5 percent in December, though the move came as the labor pool shrank.
The Commerce Department added to the fray, reporting that construction spending dropped 1.1 percent in December, the most in 15 months and twice what analysts expected.
The week's gains restored some of the huge losses seen in the earliest days of the year. Still, stocks finished their worst January since 1990. The S&P 500 lost 6.1 percent for the month.
Digital River lost $6.82, to $30.68, after the e-commerce software company said its fourth-quarter earnings rose but predicted first-quarter and 2008 results below Wall Street forecasts.
VeriSign rose $1.93, to $35.85, after the company, which runs some of the Internet's core systems, reported adjusted quarterly profit that narrowly beat analyst estimates and detailed plans to divest all its noncore businesses.