Wall St hits new highs on recovery hopes
U.S. stocks rose on Friday after trading in the red most of the day as investors concluded weak December jobs data wouldn't interrupt a trend of steady economic recovery.
The S&P 500 and the Dow hit new 15-month highs while the Nasdaq climbed to its highest level in 16 months. Friday closed a strong week for U.S. stocks with the S&P 500 climbing all five sessions.
The economy unexpectedly shed 85,000 jobs in December, the Labor Department reported, but analysts said this was not inconsistent with a slowly recovering economy as the pace of monthly jobs losses have declined sharply since the height of the recession.
In addition, November's payrolls report was revised to a gain in jobs, bolstering that view.
I don't think that we should expect that we're going to go up in a straight line, said Linda Duessel, market strategist at Federated Investors in Pittsburgh. Last month of course was revised up. This one will probably get revised at least in a more positive direction.
The Dow Jones industrial average <.DJI> rose 11.33 points, or 0.11 percent, at 10,618.19. The Standard & Poor's 500 Index <.SPX> climbed 3.29 points, or 0.29 percent, at 1,144.98. The Nasdaq Composite Index <.IXIC> added 17.12 points, or 0.74 percent, at 2,317.17.
Analysts polled by Reuters had expected no non-farm job losses in December from the previous month. A weaker report is also supportive of the view that Federal Reserve will keep interest rates low for a prolonged period, which is favorable for stocks.
Losses were also curbed after shipping company United Parcel Service Inc
The first week of the year got off to a positive start. For the week the Dow rose 1.8 percent, the S&P added 2.7 percent, while the Nasdaq rose 2 percent.
The news from UPS also helped shares in rival Fedex Corp
Both UPS and FedEx are economic bellwethers because they reflect trends in business and consumer spending.
Biotechnology companies were among top gainers on the Nasdaq.
Teva Pharmaceutical Industries Ltd
Genzyme Corp
Also helping the Nasdaq, Morgan Stanley started the healthcare services sector with an 'attractive' view. Part of that call included an 'overweight' rating for Express Scripts
Investors will now turn their attention to reports on fourth-quarter earnings, which starts with Alcoa after the bell on Monday.
Since the start of the year, analysts have revised up their earnings estimates for seven out of ten S&P sectors. Healthcare, financials, and consumer staples are the only three sectors to see declines, according to Bespoke Investment Group.
Alcoa's shares rose 2.5 percent to $17.02.
Volume was light on the New York Stock Exchange, with slightly less than 1 billion shares changing hands, compared with last year's estimated daily average of 2.18 billion. On the Nasdaq, about 2.16 billion shares traded, above last year's daily average of 1.63 billion.
Advancing stocks outnumbered declining ones on the NYSE by a ratio of about 3 to 2, while advancing stocks beat decliners on the Nasdaq by about 7 to 4.
(Reporting by Edward Krudy; Editing by Kenneth Barry)
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