Dow Crosses 14,000 For First Time Since 2007
February 1, 2013
U.S. stocks surged as growth in American payrolls was enough to ease concern about the economy without stoking speculation the Federal Reserve will hasten the end of stimulus. Silver and copper led gains in commodities and the yen weakened, while Treasuries erased early gains.
The Dow Jones Industrial Average rose 145.75 points at 1:43 p.m. in New York to trade above 14,000 for the first time since 2007, while the S&P 500 Index jumped 1 percent to return to a five-year high following a two-day slump. The 10-year Treasury yield rose two basis points to 2 percent. Spain’s IBEX 35 Index slid to a one-month low as regulators lifted a ban on short selling, while China’s Shanghai Composite Index capped the best week since October 2011 as manufacturing expanded. The yen sank against 15 of its 16 major peers.
U.S. employers added 157,000 jobs in January after accelerating more than previously estimated at the end 2012, Labor Department figures showed, while other reports on consumer confidence, manufacturing and construction spending topped forecasts. The data eased concern about the world’s largest economy following a report earlier this week that showed gross domestic product shrank last quarter for the first time since the recession.
“The most positive part of the headline was the revisions,” said Liz Ann Sonders, the New York-based chief investment strategist at Charles Schwab Corp., which has $1.95 trillion in client assets. “That’s particularly good because of the negative 0.1 percent GDP report. The market is telling you that the economy is not as bad as many people believe. The fact the January was up very nicely typically bodes well for the rest of the year.”
The Labor Department revised earlier data to show a 196,000 increase in jobs for December and a 247,000 surge in November, adding a total of 127,000 jobs to the count for those two months. Labor also issued its annual benchmark update, which aligns data spanning from April 2011 to March 2012 with corporate tax records. The revision showed payrolls grew by an additional 424,000 workers, on an unadjusted basis, in that period. The jobless rate increased to 7.9 percent from 7.8 percent.
“This is the second consecutive report that the unemployment rate has increased primarily due to individuals streaming back into the workforce, which is a sign of growth in confidence in the economic expansion, and perhaps the exhaustion of savings and employment benefits,” said Joseph Brusuelas, senior economist at Bloomberg LP, parent of Bloomberg News. “While there are encouraging signs, caution is the proper way for investors to proceed.”
Bank of America Corp., Travelers Cos. and United Technologies Corp. climbed at least 2 percent to lead gains in the Dow Jones Industrial Average.
All 10 industry groups in the S&P 500 advanced. Financial shares climbed 1.6 percent as a group. Tyson Foods Inc. gained 3.2 percent after profits topped forecasts. Zoetis Inc., the animal-health company owned by Pfizer Inc., surged 20 percent in its trading debut following an initial public offering. Merck & Co. slipped 3 percent after forecasting a drop in profit this year.