Stocks rise as investors cheer hiring trends
ALEX VEIGA, AP Business Writer
Feb 7, 2014 at 2:05 PM
U.S. stocks rose sharply in afternoon trading Friday as investors found bright spots in the government's monthly employment report, including solid growth in construction and manufacturing jobs. Expedia and several other companies rose after reporting higher earnings than analysts were expecting.The gains added to a strong finish for stocks a day earlier and had the market on track to notch a slight gain for the week.KEEPING SCORE: The Dow Jones industrial average rose 117 points, or 0.8 percent, to 15,745 as of 1:34 p.m. Eastern time. The Standard & Poor's 500 index added 16 points, or 0.9 percent, to 1,789. The Nasdaq composite gained 53 points, or 1.3 percent, to 4,110.WEAKER JOB GROWTH: The Labor Department said early Friday that U.S. employers added 113,000 jobs last month, less than the average monthly gain of 194,000 in 2013. This follows December's tepid increase of just 75,000. Job gains have averaged only 154,000 the past three months, down from 201,000 in the preceding three months. Still, the latest data also showed that manufacturers, construction firms and mining and drilling companies added strong 76,000 jobs combined, a strong showing.INVESTORS REACT: Stocks initially turned lower right after the jobs data came out, then quickly reversed course."The market had a tough time figuring out what to do with the (jobs) number when it first came out," said J.J. Kinahan, chief strategist with TD Ameritrade. "As the day went on, it just kind of discounted some of the negatives in there to say, 'What do we really want? We want a growing economy, and these are the jobs we got for a growing economy."UNEMPLOYMENT FALLS: The government also reported that the nation's unemployment rate dipped to 6.6 percent in January from 6.7 percent in December. It was the lowest rate since October 2008.BROADER GROWTH TREND INTACT? Some market watchers interpreted the latest job numbers as not necessarily indicative of the overall strength of the U.S. economy and job market, citing the likely impact of unusually harsh weather that battered much of the East Coast this winter. "This was heavily influenced by cold weather in January and should not be viewed as a break in the trend," said Tim Hopper, chief economist at financial services company TIAA-CREF.U.S. EARNINGS: Online travel service Expedia soared $8.232, or 12.6 percent, to $73.38 after reporting that its profit and revenue jumped on increased hotel bookings and revenue from a new venture. LinkedIn fell $15.20 or 6.8 percent, to $208.20 after the company said its performance may falter this year as it spends more on long-term projects and revenue growth slows. Fairway, a grocery store chain, plunged $3.22, or 28.2 percent, to $8.21 after it reported a loss in its fiscal third quarter and said its CEO is stepping down.CALMER WATERS: After a turbulent start to the week, did the jobs data give investors reason to feel better? Hard to say. The upward trajectory of stocks Friday is an encouraging sign, said Brad Sorensen, director of market and sector analysis at the Schwab Center for Financial Research. "It doesn't mean there's not more downside over the next week or two," he said.BUYING BONDS: The yield on the 10-year Treasury note edged down to 2.67 percent from 2.70 percent as investors moved money into bonds. It slid as low as 2.63 percent shortly after the jobs report came out at 8:30 a.m. Eastern time. The yield, which affects rates on mortgages and other consumer loans, had been edging higher after falling to 2.58 percent on Monday, the lowest level in more than two months.TURNAROUND WEEK: The market dug itself a hole at the start of the week, plunging more than 2 percent on Monday. But stocks were on track to finishing slightly ahead for the week. The Dow was up 0.3 percent for the week, while the S&P 500 was heading for a 0.4 percent bump.IN THE GREEN: The gains were broad. All 10 sectors in the S&P 500 index moved higher. Three stocks rose for every one that fell.BON VOYAGE: Online travel sites were soaring in afternoon trading. In addition to Expedia, TripAdvisor leaped $7.97, or 10.3 percent, to $85.10.MOVING ON UP: Among the stocks posting sizable gains were publishing company News Corp., which rose $1.22, or 7.6 percent, to $17.24. The Gap also added $2.43, or 6.1 percent, to $42.14.SLIDING DOWN: Cigna led the roster of decliners in the S&P 500 after reporting earnings that fell short of analysts' expectations. The company sank $8.77, or 10.3 percent, to $76.60. Also sliding was Wyndham Worldwide. It shed $2.97, or 4.1 percent, to $69.41.