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Journalism of Courage
NEW YORK, MAR 4: US stocks soared in late trading on Friday after a report on unemployment and wages showed no signs of inflation, sparking a broad rally that drove the Nasdaq market into record ground and closer to the magic 5,000 level.
"It’s the first sign that the economy is slowing to a much more sustainable pace," said Hugh Johnson, the chief investment officer of First Albany Corp in Albany, NY.
Technology stocks saw some of the biggest gains, with the Nasdaq Composite Index up 149 points, or 3.14 per cent, at 4,903.87, a new intra-day high, marking the first time the index moved above 4,900.
Semiconductor stocks jumped after the Wall Street firms, Goldman Sachs and SG Cowen, made positive comments about some stocks in the sector. Altera Corp surged 14-5/8 to 96-1/2 and Texas Instruments rose 11-3/4 to 185, and Intel Corp, a Dow component, rose 3-1/8 to 118-7/8. All three touched new highs.
The Philadelphia Stock Exchange Semiconductor index surged 6.2 per cent to a new high.
The Dow Jones industrial average was up 210 points, or 2.07 percent, at 10,374, its highest level in three weeks.
The average was bolstered by gains both in technology and "old economy" stocks, which have been battered by fears that a tight labour market or any signs of inflation could unleash a wave of interest rate hikes by the Federal Reserve in its quest to avert inflation.
Chemical giant DuPont rose 4-1/4 to 51-1/8 and industrial conglomerate Minnesota Mining & Manufacturing was up 4-3/16 at 90-1/4.
The Standard & Poor’s 500 Index was up 27 points, or 1.96 per cent, at 1,408.
The rally started after February’s employment report indicated the economy may be slowing and that inflation remains under control.
The US labour department reported that non-farm employment rose by a smaller-than-expected 43,000 in February, while the jobless rate increased to 4.1 per cent from 4.0 the previous month.
Of the new jobs created in February, half were census workers, Bruce Steinberg, the chief economist at Merrill Lynch, said in a note to clients.
Wages rose, but in line with expectations. Average hourly wages inched up 0.3 per cent to $13.53 from $13.49.
Economists surveyed by Reuters predicted, on average, that non-farm payrolls would gain 206,000 and the unemployment rate would be 4.0 per cent in February. In January, payrolls increased by a revised 384,000.
