NEW YORK – U.S. stocks rallied Friday, driving the Dow up more than 100 points, as a government report showed stronger-than-expected job growth in February, signaling to Wall Street that the economy can expand even as interest rates rise.
The Dow Jones industrial average climbed 104.06 points, or 0.95 percent, to end at 11,076.34. The Standard & Poor's 500 Index was up 9.35 points, or 0.73 percent, at 1,281.58.
The Nasdaq Composite Index snapped a six-day losing streak, finishing up 12.32 points, or 0.55 percent, at 2,262.04. The index got a boost from shares of the Nasdaq Stock Market Inc. , which shot up 10.3 percent, or $4.06, to $43.56 after news of its proposed $4.2 billion bid for the London Stock Exchange Plc , which the British exchange rejected as too low.
On Friday, crude oil prices settled below $60 a barrel for the first time in three weeks. That also helped stocks by staving off concerns about energy-related inflation.
"We're still seeing reasonable growth in the economy ... and investors are figuring this is going to translate into strength in earnings," said Paul Nolte, director of investments at Hinsdale Associates.
The Labor Department said 243,000 jobs were added last month, above the 210,000 expected by economists polled by Reuters. But January's jobs growth was revised downward to 170,000 from the previously estimated 193,000. The unemployment rate rose to 4.8 percent in February from 4.7 percent in January.
Shares of American International Group Inc. buoyed the Dow industrials and the S&P 500 after Banc of America Securities reiterated its "buy" rating on the insurer. AIG rose 1.6 percent to $67.65 on the New York Stock Exchange.
All but two of the 30 stocks in the Dow Industrials advanced.
U.S. crude for April delivery fell 51 cents to settle at $59.96 a barrel, its first close below $60 a barrel since Feb. 17. For the week, the price of NYMEX April crude was down almost 6 percent.
TWO VIEWS OF RISING WAGES
In the February jobs report, stock investors focused on the monthly gain in average hourly earnings, which was 0.3 percent in February, in line with expectations. That relieved their fears that wage inflation may crimp corporate profits.
But bond investors fixated on the 3.5 percent annual gain in average hourly pay, which was the highest annual increase since September 2001. That made them fearful that higher wages would lead to a pickup in inflation, so they sold government debt after the jobs report.
The price of the benchmark 10-year U.S. Treasury note fell 8/32 to 97-30/32, pushing its yield up to 4.77 percent from 4.73 percent on Thursday.
The U.S. dollar hit 2006 highs against a basket of major currencies, on expectations the Federal Reserve will continue to raise interest rates.
Wall Street expects the Fed to raise its benchmark fed funds rate from the current 4.5 percent at its March meeting to control inflation, but analysts are debating how high rates will ultimately go.
Many stocks viewed as sensitive to higher interest rates began to reverse declines from earlier in the week. The Standard & Poor's materials index rose 1.8 percent, while the S&P financial services index gained 0.8 percent.
"Overwhelmingly, I think the stock market is taking the view that the economy is doing well despite the rise in interest rates, and they clearly don't think that however much interest rates go up, that it is going to impair growth, or impair profitability," said Charles Lieberman, chief investment officer of Advisors Capital Management.
GE GAINS, GOOGLE FALLS
Shares of General Electric Co. (GE) advanced 1.4 percent, or 45 cents, to $33.65 on the NYSE after media reports that online retailer Amazon.com Inc. (AMZN) was in talks with its NBC Universal unit to create a movie and television download service. GE's gain contributed the most to the S&P 500's rise.
But shares of Google Inc. kept the Nasdaq Composite under pressure, falling 1.6 percent, or $5.50, to $337.50, near a 4-1/2-month low. Google (GOOG) shares have been hit this week after the Web search company inadvertently published outdated revenue and profit projections and agreed to pay up to $90 million to settle a "click fraud" suit.
Volume was moderate on the New York Stock Exchange, where about 1.60 billion shares changed hands, slightly below last year's daily average of 1.62 billion.
On the Big Board, advancers beat decliners by a ratio of about 5 to 2.
On Nasdaq, advancers outnumbered decliners by a ratio of about 2 to 1. About 1.79 billion shares were traded, about even with the 1.8 billion daily average last year.