Dow Closes Above 11,000 for the First Time Since May

Stocks rose Friday and the Dow closed above 11,000 for the first time since before the Flash Crash of early May. September's dismal jobs reports raised traders' expectations for another round of monetary easing from the Federal Reserve next month.

The blue-chip Dow Jones Industrial Average ($INDU) rose 58 points, or 0.5%, to close at 11,006, it's highest close since May 3. The broader S&P 500 ($INX) added 7, or 0.6%, to 1,165. The tech-heavy Nasdaq Composite ($COMPX) gained 18 points, or 0.8%, to finish at 2,402.

The economy shed 95,000 jobs in September after factoring in the loss of 159,000 government jobs, including 77,000 once-in-a-decade U.S. Census worker jobs, the Labor Department said Friday. The unemployment rate remained unchanged at 9.6%, while the broader measure of both unemployment and underemployment, or U6, rose to 17.1% from 16.1%.

"This is no time to mince words," wrote David Rosenberg, chief economist at asset-manager Gluskin Sheff, in a note to clients. "The U.S. labour market is in horrible shape. The key was that excluding the Census worker layoffs, payrolls fell 18,000. Full stop. This marks the first time since December 2009 that the underlying level of nonfarm payrolls fell in a month."

Friday's grim jobs reports follows an unexpected drop in private payrolls and a surprise interest-rate cut by the Bank of Japan earlier in the week. Stocks enjoyed their best September since 1939 and are off to a strong fourth-quarter start in no small part on hopes that a weak economy will spur the Fed to a second round of so-called quantitative easing, in which it essentially prints money by buying up longer term Treasury debt. The Fed's rate-setting committee will issue its next policy announcement on Nov. 3 -- a day after the mid-term elections.

The yield on the benchmark 10-Year Treasury note, which moves opposite of price, was unchanged 2.38%. The specter of more monetary easing raised global inflation fears, pushing gold up $12.60 to $1,348 an ounce on the Comex division of the New York Stock Exchange (CME).

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