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Jobs data boosts Wall Street stocks
The Dow Jones industrial average rose 217 points to close at 13,096
A surge in hiring last month got a big welcome on Wall Street Friday.
The Dow Jones industrial average surged 217.29 points to close at 13,096.17, ending a four-day losing streak. It was the best day for the Dow since June 29.
Markets had been slumping all week after central banks in the US and Europe took no new action to shore up the economy, as investors had hoped.
The Labour Department's closely watched monthly jobs report gave investors assurance that the US economy may be doing better on its own. US employers added 163,000 jobs last month, far more than the 100,000 economists were expecting. From April to June, the economy added an average of just 73,000 jobs a month, compared with an average of 226,000 in the first three months of the year.
There was more to cheer about from the service sector, which employs 90% of all Americans. The Institute for Supply Management (ISM) reported that US service companies grew at a slightly faster pace in July. The ISM's services index rose to 52.6 from 52.1 in June, which was the lowest reading since January 2010. Any reading above 50 means that business is growing for service providers.
The good economic news caused investors to sell low-risk assets such as US government debt. The selling drove prices down and yields up. The benchmark 10-year Treasury note was yielding 1.57%, up from 1.48% on Thursday.
Oil prices also rose as investors became more optimistic about the economy. Benchmark crude shot up 4.27 dollars to 91.40 dollars on the New York Mercantile Exchange.
The broader Standard&Poor's 500 index rose 25.99 points to 1,390.99, and the Nasdaq composite index added 58.13 points to 2,967.90.
Despite the gain in hiring, there were still enough signs of weakness in the latest jobs report to keep hope alive that the Federal Reserve may still take more steps to kick-start the economy at its next meeting in September. A separate survey of households by the Labour Department found that the unemployment rate rose to 8.3% in July from 8.2% in June.
At the end of a two-day policy meeting on Wednesday, the Fed said it would take action on the economy "as needed to promote a stronger economic recovery." On Thursday, markets fell sharply after the European Central Bank didn't announce specific plans to tackle the continent's debt crisis, as many investors expected it would.