Stocks Jump as Jobs Report Provides a Little Hope (ext: ABCNews)

Stocks jumped in light trading Friday after the government reported that the pace of job losses slowed in August to the lowest level in a year.


The Dow Jones industrial average gained 97 points Friday to halve its loss for the week after the Labor Department said employers cut fewer workers last month. However the report also showed that the ranks of the unemployed swelled to 9.7 percent, the highest level since June 1983.


Rising unemployment is widely seen as the economy's biggest hurdle to recovery, and concerns about it have been weighing on the stock market. As long as job losses remain high, consumers won't feel comfortable about spending money, which the U.S. economy badly needs in order to resume growth.


"The market is looking at directional changes, and so at this state of the economic recovery I think the fact that you see unemployment rising shouldn't be that surprising," said Thomas K. R. Wilson, managing director, institutional investments group, Brinker Capital in Berwyn, Pa.

Analysts said that the thin trading volume before the long holiday weekend made it difficult to conclude that a shift in investor sentiment was occurring. Markets will be closed on Monday for Labor Day.

There were signs that investors were becoming less fearful after a four-day slide in stocks that ended Thursday. The drop included a 186-point plunge on Monday that came on fears of worries about the health of banks and the overall economy.


The Dow Jones industrial average (DJI:^DJI - News) climbed 96.66 points, or 1.03 percent, to end at 9,441.27. The Standard & Poor's 500 Index (^SPX - News) gained 13.16 points, or 1.31 percent, to 1,016.40. The Nasdaq Composite Index (Nasdaq:^IXIC - News) rose 35.58 points, or 1.79 percent, to close at 2,018.78.