NEW YORK – Stocks rose Friday as investors celebrated a much-better-than-expected employment report for February, the latest evidence the recession is over.
Indexes finished the day off their highs but still largely on the positive side.
The blue-chip Dow Jones industrial average racked up its fourth straight week of gains, finishing Friday's session with a gain of 47.12 points, or 0.45 percent, to 10,572.49. The broad Standard & Poor's 500 Index rose 6.77 points, or 0.58 percent, to 1,164.31, while the technology-packed Nasdaq Composite Index gained 48.04 points, or 2.55 percent, to 1,929.67.
For the week, the Dow rose 2 percent, the Nasdaq climbed 7 percent, and the S&P 500 rose 2.9 percent.
"The unemployment report was a lot lower than expected and it's very good news for stocks," said Larry Seruma, senior equities trader for Barclays Global Investors. "It shows the economy is fully recovering. The other big story is Sun Micro — it seems that it's going to return to profitability and that's a sector that's really taken it hard."
The Labor Department said the jobless rate declined for the second month in a row, dipping to 5.5 percent in February from 5.6 percent in the previous month.
That drop came as a rise in retail employment helped add 66,000 jobs to payrolls outside the farm sector — the first addition to payrolls since a mild 18,000 gain during July of last year. February's gains followed job losses of 126,000 in January, worse than the previously reported 89,000 job losses.
"The economy is now out of recession and expanding and that will be good news for the stock market even though interest rates will be going higher; the fundamentals of the stock market are positive because the economy is now in a growth mode," said Peter Cardillo, chief strategist at Global Partners Securities Inc.
This week brought a slew of economic data that pointed to improving business conditions. And hopes that corporate America's profits will soon follow suit have sent stock prices climbing. The big run-up encouraged some profit-taking ahead of the weekend. Investors also cashed in some chips on jitters about the escalating conflict in the Middle East.
"There are a lot of things going on in the world and some traders are trying to cut positions," said Ned Collins, a trader for Daiwa Securities Inc. "We've had a big week, so we'll go home and get some rest and come back loaded for bear next week."
Helping the Nasdaq, network computer maker Sun Microsystems Inc. (SUNW) piled on gains after it said it will keep its promise to boost revenue slightly and inch closer toward profit in its third quarter ending this month. Sun shares, the most active on Nasdaq, rose $1.17 to $10.
Tech bellwether Intel Corp. (INTC) narrowed the range of its first-quarter revenue guidance it gave in January, pushing toward the high end of the forecast. Intel shares rose $1.19 to $34.17, helping both Nasdaq and Dow as a component of the blue-chip index.
Biogen Inc. (BGEN), maker of top-selling multiple sclerosis drug Avonex, sank $4.75, or 8.4 percent, to $51.65 after news that U.S. authorities had approved a rival drug for sale in the United States.
Schering-Plough Corp. fell $1.96 to $34 after Merrill Lynch cut the stock's intermediate-term rating to "neutral" from "buy" after the drugmaker said it asked U.S. regulators to switch its Claritin prescription allergy drug to over-the-counter status.
Applied Materials (AMAT) rose $2.17 to $53.53 on the Nasdaq, also helped by news that a federal antitrust investigation into the company's technology licensing practices has been closed. The world's largest maker of tools used to build microchips made the disclosure in its quarterly report.
TiVo Inc. (TIVO) gained 2.6 percent, but later fell 23 cents at $6.53. The television recording technology device maker has reported a narrower quarterly loss and said revenue rose sharply, boosted by strong subscriber growth.
In other news, Wall Street house Salomon Smith Barney cut its investment rating on investment banks Merrill Lynch Morgan Stanley Bear Stearns, Goldman Sachs and Lehman Brothers . Salomon cut the banks' 2002/2003 earnings estimates and price targets for these firms' stocks, adding that the upside was limited.
Resistance, or the area where sellers are expected to emerge, is at 1,950 on the Nasdaq, 1,175 on the S&P, and 10,680 on the Dow, according to Schaeffer's Investment Research. Support, or the area where investors swoop in to buy stocks after a sell-off, is at 1,850 for the Nasdaq, 1,140 for the S&P 500, and 10,425 for the Dow, Schaeffer's said.
Advancing shares led decliners 5 to 4 and trading volume was heavy with about 1.4 billion shares changing hands on the New York Stock Exchange and about 2 billion shares traded on Nasdaq.
The Russell 2000 index advanced 4.93 to 499.85.
Overseas, Japan's Nikkei stock average closed up 2.0 percent. In Europe, Germany's DAX index rose 1.3 percent, Britain's FT-SE 100 gained 0.1 percent, and France's CAC-40 advanced 0.3 percent.
The Associated Press and Reuters contributed to this report.