US Stocks Head For Best Week Since March '09; DJIA Up 30
December 02 2011 - 03:28PM
Dow Jones News
U.S. stocks looked to finish a strong week with a small gain
after the U.S. unemployment rate unexpectedly dropped and European
leaders and central bankers redoubled efforts to tackle the
sovereign-debt crisis.
The Dow Jones Industrial Average was up 30 points, or 0.2%, to
12049, in Friday afternoon trading, though the measure was well
beneath highs for the day. Stocks tracked a reversal in the euro
late in the morning that traders said reflected jitters over
Europe's debt situation and investors pocketing gains after a
blockbuster week. The Standard & Poor's 500 stock-index gained
4 points, or 0.3%, to 1248, while the Nasdaq Composite gained 8
points, or 0.3%, to 2635.
Financials were off morning highs but still the strongest
performers. J.P. Morgan Chase led the Dow with a 6.4% gain,
followed by Bank of America, which added 3.3%. Among other
financial gainers, Citigroup added 5.4% while Morgan Stanley tacked
on 8.1% and Goldman Sachs Group climbed 4.3%. Utilities and health
care, viewed as two of the more defensive sectors, posted a
decline.
"I think it's natural to have a bit of hesitation here," said
Brian Lazorishak, portfolio manager and quantitative analyst at
Chase Investment Counsel. "Who knows exactly what another weekend
could bring out of Europe. We seem to be trading on every little
bit of news."
The major indexes are looking to close the week with their
strongest gains in more than two years. As of midsession, the Dow
was up 7.6% on the week, the S&P 500 had gained 8.2%, and the
Nasdaq had risen 8.3%. Each measure was on track for the biggest
weekly gain in percentage terms since March 2009.
The latest gains came after German Chancellor Angela Merkel
called a proposal to create national funds to administer excessive
debt in euro-zone nations an "interesting idea," according to her
spokesman. Ms. Merkel and French President Nicolas Sarkozy also are
finalizing a plan to strengthen euro-zone stability rules,
including implementing European Union treaty changes.
Meanwhile, European officials are considering a proposal to
channel as much as $270 billion in loans from the European Central
Bank through the International Monetary Fund to fight the debt
crisis, according to Bloomberg News.
Friday's gains followed a rise in U.S. nonfarm payrolls by
120,000 last month, while the unemployment rate, obtained by a
separate survey of U.S. households, fell to 8.6% in November from
9.0% the previous month, well outstripping forecasts. The rate is
now lower than at any point since March 2009, when it was 8.6%.
In addition, October's nonfarm-payroll figure was revised upward
to a 100,000 gain from the previously reported 80,000 and
September's number rose to 210,000 from 158,000.
"The economy is improving slightly. Certainly take away that
recession risk. Worst case scenario, probably, there could be a
mild recession," said Peter Cardillo, chief market economist at
Rockwell Global Capital.
H&R Block fell 6.6% after the tax preparer's fiscal
second-quarter loss widened amid a jump in overhead costs.
Zumiez surged 23% after fiscal third-quarter earnings rose 15%
as the teen-apparel retailer's same-store sales continued to
climb.
Research In Motion tumbled 9.3% after the BlackBerry maker said
it would take a $485 million charge in its fiscal third quarter
after marking down the value of its large inventory of PlayBook
tablets. The company also revised its revenue and earnings
projections downward and warned of a continued decline in
BlackBerry shipments.
Online-games developer Zynga set the terms of its planned
initial public offering, seeking as much as $1 billion by selling
100 million shares at a price between $8.50 and $10. At the high
end of its range, Zynga commands a valuation of nearly $7 billion,
according to an updated prospectus filed Friday.
Western Digital rose 7.2%. The company raised its fiscal
second-quarter revenue outlook as it resumed hard-drive production
in Thailand after that country's flooding, while Rival Seagate
Technology, previously expected to gain market share at Western
Digital's expense, lost 7.8%.
Alexander & Baldwin leapt 16% after saying it would split
into two publicly traded companies, one focused on ocean
transportation and logistics and another on Hawaii real estate and
agriculture.
-By Brendan Conway, Dow Jones Newswires; (212) 416-2670;
brendan.conway@dowjones.com