Stocks Extend Rally After Jobs Report  09/03 15:44

   The stock market had its first winning week in a month after news on the 
economy started getting better.

   NEW YORK (AP) -- The stock market had its first winning week in a month 
after news on the economy started getting better.

   The Dow Jones industrial average jumped 128 points Friday, its fourth 
straight day of gains. The strong start to September marked a turnaround from a 
dismal performance in August.

   A better report on employment Friday was the latest piece of improving news 
on the economy. Stocks also gained earlier this week following signs that 
manufacturing was gaining in the U.S. and China.

   Even after its four-day run, which added 438 points to the Dow, the index is 
still 6.8 percent below the 2010 high its reached on April 26. Stocks eased off 
their best levels in the afternoon after a report showed that the services 
sector didn't grow as fast as hoped in August.

   The jobs reported "created a bit of optimism, but there's still a degree of 
caution," said Nick Kalivas, vice president of financial research for MF Global.

   The Labor Department said private employers added 67,000 jobs in August, 
more than the 41,000 economists polled by Thomson Reuters had forecast. While 
the report added a small dose of optimism, it also shows that the economic 
recovery is still tenuous.

   "We need to get that number over 100,000 to feel comfortably that we won't 
slip back into recession," said Bill Hampel, chief economist for the Credit 
Union National Association. "We need it over 150,000 to feel confident we have 
a nice, sustainable recovery."

   Investors have received more encouraging reports on the economy over the 
past three days than they did throughout August, when data regularly fell short 
of the market's already modest expectations. Reports beginning with Wednesday's 
manufacturing data touched off a rally at the beginning of September, which is 
historically a bad month for stocks.

   There were other encouraging signs throughout the employment report Friday, 
including revisions to June and July's reports that showed the economy added 
more jobs than the government previously said.

   More than a half-million Americans resumed their job searches in August. 
That drove up the unemployment rate to 9.6 percent from 9.5 percent, but it 
could also be a sign that more people are hopeful about the recovery.

   According to preliminary calculations, the Dow closed up 127.83, or 1.2 
percent, at 10,447.93.

   The Standard & Poor's 500 Index rose 14.41, or 1.3 percent, to 1,104.51, 
while the Nasdaq composite index rose 33.74, or 1.5 percent, to 2,233.75.

   About three stocks rose for every one that fell on the New York Stock 
Exchange, where volume was relatively light at 950 million shares.

   Bond prices fell as sentiment on the economy improved, sending interest 
rates higher. The yield on the 10-year Treasury note jumped to 2.71 percent 
from 2.63 percent late Thursday. Its yield is often used as a gauge to set 
interest rates on mortgages and other consumer loans.

   For the week, the Dow is up 2.9 percent, while the S&P 500 and the Nasdaq 
are both up 3.7 percent. It was the first week of gains in a month for both the 
Dow and S&P.

   The S&P 500, the market gauge most used by professional investors, lost 4.7 
percent in July on a string of disappointing economic news. That was the worst 
August performance for the index since 2001, when the dot-com bubble was 
imploding.


(KM)