Stocks rise as jobs shrink
Shares closed sharply higher as shock dissipated over a report of disappearing jobs.
NEW YORK - Wall Street put an upbeat spin yesterday on the government's report that the nation lost more than half a million jobs last month. Stocks reversed early losses and closed sharply higher as the data raised hopes that Washington would again step in to help the economy.
The Dow Jones industrial average closed up nearly 260 points as investors' shock dissipated over the Labor Department's report. It said that employers slashed 533,000 jobs in November, compared with the 320,000 that economists forecast.
Job losses were widespread, hitting manufacturing, construction, retail, financial and other sectors.
Beyond the hopes for more aggressive moves by the government, strength in the tattered financial sector also gave a boost to the overall market yesterday. An upbeat forecast from Hartford Financial Services Group Inc. cut through some of investors' fears that profits among financial firms would continue to spiral lower.
The Dow industrials jumped 259.18, or 3.09 percent, to 8,635.42 after falling by 258 and rising as much as 310 in the volatile trading late in the session. The Standard & Poor's 500 index rose 30.85, or 3.65 percent, to 876.07, and the Nasdaq composite index rose 63.75, or 4.41 percent, to 1,509.31.
The Russell 2000 index of smaller companies rose 21.56, or 4.91 percent, to 461.09.
For the week, the Dow fell 2.2 percent, the S&P 500 declined 2.3 percent and the Nasdaq fell 1.7 percent.
Light, sweet crude fell $2.86 to settle at $40.81 a barrel on the New York Mercantile Exchange. Concerns about the economy and weakening energy demand have kept oil prices near four-year lows.
The stock market, which generally looks ahead, tends to recover six to nine months before economic reports show a recession is abating.
General Motors Corp., Ford Motor Co. and Chrysler L.L.C. are collectively seeking $34 billion in federal emergency funding. While the market largely expects the companies will win some sort of government aid, support for the carmakers is not assured.
GM fell 3 cents, or 0.73 percent, to $4.08, while Ford rose 6 cents, or 2.26 percent, to $2.72. Chrysler is not publicly traded.
Financial stocks also rallied after Hartford's forecast. Hartford's stock doubled, jumping $7.38 to close at $14.59. Other financials jumped as well. Wells Fargo & Co. rose $2.39, or 8.68 percent, to $29.94, while Prudential Financial Inc. surged $7.35, or 34.72 percent, to $28.52. Lincoln National Corp., of Radnor, rose $5.15, or 42.18 percent, to $17.36.