By Michael A. Fletcher
Friday, September 3, 2010; 10:07 PM
The stock markets topped off their best week in a month Friday, as the latest jobs report calmed fears that the sputtering economy was headed toward a double-dip recession.
The major stock indexes climbed more than one percent Friday, as stocks were up across nearly all sectors and winners outpaced losers by about 3 to 1.
The S&P 500-stock index, the broadest measure of stocks, rose 1.32 percent to close at 1104.51. It was the index's fourth consecutive winning day.
The rally was fueled by a new labor market report that showed modest private-sector job creation. The report gave investors confidence that economic growth has not completely stalled.
Although the jobs news was hardly spectacular - unemployment rate edged up to 9.6 percent and private-sector job creation continued at a tepid pace - the report was better than many forecasters had predicted.
The jobs report came on the heels of news earlier this week of an unexpected bump in both retail sales and the number of contracts signed by home buyers in July - a sign that the real estate market may soon be seeing a pick-up in sales.
"By and large the news had been better this week," said Andrew M. Brooks, vice president and head of U.S. equity trading at T. Rowe Price. "We're coming back. The bounce-back suggests that we were probably oversold. Treasuries and money markets are paying very little, so if investors want any return they have to take a little risk and get back into equities."
Technology and financial stocks saw some of the biggest gains. Cisco rose 2.53 percent, while J.P. Morgan Chase jumped 2.65 percent.
The Dow Jones industrial average climbed 127.83 points, or 1.23 percent, to close at 10,447.93. All 30 stocks in the index climbed.
The tech-heavy Nasdaq composite index was up 33.78 points, or 1.53 percent, closing at 2233.75.
The gains capped a strong week for the markets, as the S&P 500 and the Nasdaq were both up 3.7 percent. The Dow, meanwhile, was up 2.9 percent.
The jump in the stock market comes after a brutal August, and put the market back in the black for the year. Still, the Dow remains 6.8 percent below the 2010 peak it reached in April.
With greater appetite on Wall Street for riskier, higher-returning assets, the demand for safer investments fell.
The dollar weakened compared to most of the world's major currencies. Gold, which has been hitting record heights during the economic turmoil, dropped .33 percent.
Likewise, bond prices declined with the improving view of the economy. The yield on 10-year Treasury notes, which moves in the opposite direction of bond prices, edged up to 2.71 percent, from 2.63 a day earlier.