Signs of Firm U.S. Recovery Trigger Market Gains; Dow Around 14,000

Stock market recoveryBy CARLO PIOVANO

LONDON (AP) - Evidence that the U.S. economic recovery is firmly on track drove markets higher on Friday, adding to the cheer from good economic indicators out of Europe.

The world's largest economy added 157,000 jobs in January, in line with market expectations, though hiring over the past two years was revised up. The improvement was not sufficient to prevent the unemployment rate - which is based on surveys of households, not employers - from edging up to 7.9 percent from 7.8 percent in December.

But the figure eased concerns that the U.S. economic recovery may have been running out of steam. Official data this week showed the economy contracted on an annualized basis in the fourth quarter for the first time in three years, though mainly due to a one-off fall in defense spending.

Other indicators released Friday proved similarly upbeat - a measure of manufacturing activity in the U.S. rose strongly in January while construction spending grew in December.

In Europe, Germany's DAX rose 0.7 percent to close at 7,833.39 while France's CAC-40 added 1.1 percent to 3,773.53. Britain's FTSE 100 rose 1.1 percent to 6,347.24.

Wall Street rallied as well, with the Dow rising 1 percent to 13,999.08, trading momentarily above 14,000 for the first time since October 2007. The broader S&P 500 added 1 percent to 1,512.31.

Although the Dow Jones industrial average finished lower on Thursday, the index logged its best January since 1994 by finishing 5.8 percent higher for the month. The Standard & Poor's 500 finished the month 5 percent higher, its best start to the year since 1997.

Earlier, upbeat news in Europe had helped push markets higher. Official figures showed the unemployment rate in the 17-country eurozone was at a lower-than-expected 11.7 percent in December, unchanged from the previous month's rate, which was revised down from 11.8 percent, a record high. Inflation was also steady, suggesting the recession ravaging the currency union is it abating.

"With eurozone economic activity seemingly bottoming out last October and business confidence picking up, the pressure on labor markets has eased," said Howard Archer, chief European economist at HIS Global Insight.

"Nevertheless, business confidence is still relatively low in most countries and eurozone economic activity is unlikely to be strong enough to prevent further rises in unemployment over the coming months."

Earlier in Asia, stocks were mixed after manufacturing data from China fell short of expectations. Industrial production is still growing, but at a slower pace, according to the government-sanctioned China Federation of Logistics and Purchasing. Its manufacturing index for January fell to 50.4 from 50.6 in December on a 100-point scale in which numbers above 50 indicate expansion.

Hong Kong's Hang Seng fell marginally to 23,721.84. South Korea's Kospi dropped 0.2 percent to 1,957.79. Australia's S&P/ASX 200 gained 0.9 percent to 4,921.10. The ASX closed at 4,879 on Thursday, capping its best January since 1995, Lucas said.

Japan's Nikkei 225, meanwhile, was once again energized by the yen's continued descent against the dollar. The index rose 0.5 percent to 11,191.34.

Benchmark oil for March delivery was up 46 cents to $97.95 per barrel in electronic trading on the New York Mercantile Exchange. The contract fell 45 cents to close at $97.49 a barrel on the Nymex on Thursday.

In currencies, euro rose to $1.3701 from $1.3574 late Thursday in New York. The dollar rose to 92.51 yen from 91.38 yen.

Increase your money and finance knowledge from home

Investing in Real Estate

Learn the basics of investing in real estate.

View Course »

Reading a Stock Quote

Learn to read the ingredients of a stock.

View Course »

Add a Comment

*0 / 3000 Character Maximum

43 Comments

Filter by:
Danny

How many robots are unemployed that took an American workers job? You have to figure is production is down to see where the economy stands. Robots should be counted as people and we would see that the ecomony is really growing.

February 02 2013 at 6:34 AM Report abuse rate up rate down Reply
Iselin007

The best question asked by gansta trash was ( Why are you here if you have a Higher Education) ?

February 01 2013 at 5:05 PM Report abuse rate up rate down Reply
Iselin007

Time for the can of worms to be open up lets ship the gangsta trash overseas where they can worship satan.

February 01 2013 at 5:02 PM Report abuse rate up rate down Reply
Iselin007

Glad they will allow combat for woman because the spoiled gansta queens interviewing older workers and discriminating against them need to be drafted an sent to the front lines to shield our real troops from enemy fire!

February 01 2013 at 5:00 PM Report abuse rate up rate down Reply
Iselin007

I saw too many plants close and too many people sent to the street to retrain for non existant entry level jobs regardless of the GPA scores. School just to baby sit a group of older people because there aren't jobs is a false hope and a change for the worse. College grads can't find jobs unless it's pushing older workers out!

February 01 2013 at 4:56 PM Report abuse rate up rate down Reply
Iselin007

The results are in unemployment remains high especially in New Jersey. Trade deals stink they have no mercy for older people who lost their trades in Elecronics manufacturing etc. If people are 8 years from retirement they are screwed. You can't live on hope and change!

February 01 2013 at 4:50 PM Report abuse rate up rate down Reply
onlymdh

The "austerians" have been proved wrong. Look at the UK and Europe. Government implementation of heavy handed austerity programs has cratered many of their economies. Despite the efforts of the right wing Republican hooligans, Obama was able to resist the pressure to make massive cuts that would have jacked up unemployment. As a result, the US economy, while not as robust as it could be, is a whole lot better off for it.

February 01 2013 at 4:39 PM Report abuse rate up rate down Reply
bobbsafe

It's great for Wall Street Hedge Fund gamblers and those who own stocks, but at this rate the market will more than double this year. In other words - Wall Street loves to run the market up way too fast, based on "hope" and glee. Then it comes crashing back down. I would prefer to see a much slower steady market that walks in step with Main street and the economy, and not based on the Fed printing inflationary dollars.

February 01 2013 at 4:11 PM Report abuse rate up rate down Reply
ga7smi

last quarter GDP was negetive - apparently that indicates strong economy

February 01 2013 at 4:11 PM Report abuse rate up rate down Reply
1 reply to ga7smi's comment
Iselin007

It's amazing what Zoloft can do for Wall St.

February 01 2013 at 4:31 PM Report abuse rate up rate down Reply
raydelv

The Dow hitting 14,000 it’s great for my 401K but it does not mean there is a real recovery going on. Unemployment went up from 7.8 to 7.9 today the economy added only 157 thousand jobs. Growth is at a snail’s pace, interest rates are at very low rates, investors are putting their money into the market which explains why the Dow is in an upward mode. Home prices are up because prices have hit or are near hitting rock bottom and mortgage rates are low. If you can get a 2, 2.5, 3 percent mortgage you’re paying back the loan sooner more principal less interest.

February 01 2013 at 3:27 PM Report abuse +2 rate up rate down Reply
3 replies to raydelv's comment