By , Associated Press | May 2, 2008
Wall Street extended its advance today after a government employment report showed the nation's employers cut far fewer jobs than expected last month, stirring optimism about the buoyancy of the economy. The Dow Jones industrial average rose more than 110 points.
A separate report showing factory orders increased in March following two months of declines helped boost investors' enthusiasm.
The better-than-expected employment report comes days after the Federal Reserve lowered interest rates by a quarter point and signaled it could stand pat at future meetings — a move that could help shore up an anemic dollar and combat worrisome inflation.
The Labor Department's report that employers cut 20,000 jobs in April was a relief to Wall Street, which had been expecting payrolls to decrease by 70,000 jobs. This marked the fourth straight month of job losses, but the data signaled that perhaps the economy might be resisting falling into recession.
The Commerce Department said Friday that American manufacturers saw orders increase 1.4% in March. Economists had been expecting a 0.2% increase after declines in January and February.
Meanwhile, the Fed said today it will work with European central banks to expand a series of efforts to deal with the global credit crisis. The central bank will boost the amount of emergency reserves it supplies to American banks to $150 billion in May, up from the $100 billion it supplied in April.
"This is going to put some fuel in the tanks for stocks," the president of Johnson Research Group, Chris Johnson, said of the employment report and the Fed's moves. "This was a direct hit in terms of the economy fighting back."
In midmorning trading, the Dow rose 117.65, or 0.90%, to 13,127.65.
Broader stock indicators also rose. The Standard & Poor's 500 index advanced 12.71, or 0.90%, to 1,422.05, and the Nasdaq composite index rose 13.30, or 0.54%, to 2,494.01.
Stocks surged yesterday as investors viewed the rising dollar and falling oil prices as promising signs for the economy. The Dow soared nearly 190 points to close above 13,000 for the first time since January 3.
Bond prices fell today as investors moved into stocks from the safety of government debt. The yield on the benchmark 10-year Treasury note, which moves opposite its price, rose to 3.86% from 3.77% late yesterday.
Oil prices moved higher after retreating yesterday on a strengthening dollar. Light, sweet crude rose $1.39 to $113.91 per barrel on the New York Mercantile Exchange.
Advancing issues outnumbered decliners by nearly 4 to 1 on the New York Stock Exchange, where volume came to 219.2 million shares.
Overseas, Japan's Nikkei stock average rose 2.05%. In afternoon trading, Britain's FTSE 100 rose 1.72%, Germany's DAX index added 1.67%, and France's CAC-40 rose 2.06%.
