Market leaps as employers cut far fewer jobs than expected in November; factory orders rise

Stocks jump as employers cut fewer jobs

NEW YORK — Investors are taking a brighter employment picture as a sign the recovery is picking up momentum.

The stock market jumped and Treasurys and gold fell Friday after employers cut far fewer jobs in November than expected.

Major stock indexes climbed about 1 percent, including the Dow Jones industrials, which added 90 points. Meanwhile, the dollar rose as investors interpreted a positive trend in employment as a sign the Federal Reserve will have more room to raise interest rates.

The Labor Department said the economy shed 11,000 jobs last month, the smallest monthly loss since December 2007. That’s much better than the 130,000 job losses that Wall Street economists expected and than the revised loss of 111,000 job losses for October.

The unemployment rate fell to 10 percent from 10.2 percent in October, a 26-year high. Economists had expected the rate to remain unchanged.

Meanwhile, the Commerce Department said orders to U.S. factories posted a surprise jump in October as demand jumped for aircraft and energy. Orders rose 0.6 percent in October, better than the flat reading that economists had expected. It was the sixth increase in seven months.

Phil Orlando, chief equity market strategist at Federated Investors in New York, said the jobs and factories reports could draw investors into the market who had been skeptical about how well the economy was doing.

“This number was just phenomenal,” said Phil Orlando, chief equity market strategist at Federated Investors in New York, referring to the job loss figure. “That sound you heard was bears fainting all across America and hitting their head on the pavement.”

In late morning trading, the Dow Jones industrial average rose 93.71, or 0.9 percent, to 10,459.86. The Dow reached a new trading high for the year of 10,516.70.

The broader Standard & Poor’s 500 index rose 14.44, or 1.3 percent, to 1,114.36, rising to a 2009 high of 1,119.13.

The Nasdaq composite index rose 37.23, or 1.7 percent, to 2,210.37, reaching a high for the year of 2,214.39.

The jobs report weighed on bond prices, pushing yields higher. The benchmark 10-year Treasury note fell about a point, pushing its yield up to 3.51 percent from 3.38 percent late Thursday. The yield on the three-month T-bill rose to 0.05 percent from 0.04 percent.

The stock market’s climb came even as the dollar rose. For months, stocks have fallen when the dollar strengthens because a rising greenback makes commodities more expensive for foreign buyers and can eat into the profits U.S. companies collect from overseas.

The price of gold fell as the jobs report drove investors to take on riskier areas like stocks.

Crude oil rose 71 cents to $77.17 per barrel on the New York Mercantile Exchange.

The Russell 2000 index of smaller companies rose 15.98, or 2.7 percent, to 604.76.

Overseas, Japan’s Nikkei stock average rose 0.5 percent. In afternoon trading, Britain’s FTSE 100 rose 1.1 percent, Germany’s DAX index rose 1.5 percent, and France’s CAC-40 jumped 2 percent.

Augstums reported from Charlotte, N.C.