Stocks jump Friday; S&P 500 sets record

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NEW YORK -- Wall Street capped a huge week with a sharp advance Friday after a government employment report cooled fears of a recession. The Standard & Poor’s 500 index, the measure most closely followed by market watchers, reached a new closing high.

The Labor Department’s report that employers added 110,000 jobs in September -- essentially what analysts had expected -- reassured Wall Street that the job market wasn’t pulling back sharply as was feared a month ago. Though the data appeared to lessen the likelihood of an interest rate cut when the Federal Reserve meets Oct. 30-31, investors were relieved that the economy doesn’t appear headed for a precipitous slowdown.

Strength this year in the job market amid a housing downturn and tighter credit conditions has been an important pillar for the economy. With consumer spending accounting for about two-thirds of U.S. economic activity, investors are eager for workers to continue to collect their paychecks.

Much of Wall Street’s collective exhale Friday owed to a revision in August payrolls, which were updated to show a gain of 89,000 jobs compared with an earlier estimate of loss of 4,000 jobs. The release of the August figure -- when economists had predicted a rise -- sent the Dow down nearly 250 points in a single session and, market watchers say, played a role in the Fed’s decision to cut its key interest rate by a larger-than-expected half-percentage point last month.

According to preliminary calculations, the Dow Jones industrial average rose 91.70, or 0.66%, to 14,066.01. The blue chip index set a new trading high of 14,124.54, topping a high of 14,115.51 set Monday, when the index also saw a record close.

Broader stock indicators also jumped. The S&P 500 index rose 14.75, or 0.96%, to 1,557.59. The advance put the S&P 500 ahead of the previous record close of 1,553.08, which occurred July 19 before stocks began a broad retrenchment amid concerns about credit, housing and the overall economy. The S&P 500, which is the basis of many mutual funds and other investments and used as a benchmark for others, also set a fresh trading high of 1,561.91, topping a July 16 high of 1,555.90.

The technology-dominated Nasdaq composite index showed bigger gains, rising 46.75, or 1.71%, to 2,780.32.

Likewise, the Russell 2000 index of smaller companies rose 15.71, or 1.89%, to 844.86.

The gains left stocks sharply higher for the week.

Bond prices fell sharply as investors interpreted the jobs data as evidence against a rate cut. The yield on the 10-year Treasury note, which moves opposite its price, climbed to 4.64% from 4.53% late Thursday.

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