Wall St jumps on bargain hunting in volatile week

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(Agencies)
Updated: 2008-11-08 10:36

NEW YORK - U.S. stocks rose on Friday as bargain hunters scooped up shares at multiyear lows after a big drop in the October payrolls was less dire than feared.

Traders on the floor of the New York Stock Exchange surround the post that handles Wells Fargo, after the closing bell Friday, Nov. 7, 2008. Buyers returned to Wall Street Friday after two days of heavy losses, mindful of the economy's growing problems but attracted by stocks' lower prices. [Agencies]

For the week, though, the indexes closed lower after an extremely volatile run since Monday's opening bell. The first week of November was capped not only by the biggest Election Day rally ever, but followed by a huge reversal the next day. The week included the biggest two-day dive since October 1987.

"Essentially, the markets moved higher today because much of the bad news in today's employment report was already incorporated into the minds of investors," said Michael Sheldon, chief market strategist at RDM Financial in Westport, Connecticut.

Goldman Sachs analysts had expected up to 300,000 jobs may have been cut from non-farm payrolls in October. So when the Labor Department reported 240,000 jobs lost last month, that did not send the stock market into a tailspin even though the figure exceeded the median forecast of 200,000.

Exxon Mobil surged 6.3 percent and gave the biggest lift to the Dow, benefiting from bargain hunting and oil's ability to stay above the psychologically important $60-a-barrel level.

Stocks pared gains immediately after a news conference by President-Elect Barack Obama on some disappointment that he did not outline any new additional steps to shore up the ailing economy in the near term. But stocks recovered by the close.

The Dow Jones industrial average climbed 248.02 points, or 2.85 percent, to 8,943.81. The Standard & Poor's 500 Index advanced 26.11 points, or 2.89 percent, to 930.99. The Nasdaq Composite Index shot up 38.70 points, or 2.41 percent, to 1,647.40.

The Dow's 4.09 percent drop this week marks the worst presidential election week for the blue chips since Harry Truman upset Thomas Dewey in 1948. For the S&P and Nasdaq, it's only the worst since the week in 2000 when there was no decision in the George W. Bush-Al Gore election.

The S&P lost 3.9 percent for the week and the Nasdaq finished the week down 4.3 percent.

Although a government report showed U.S. employers cut payrolls by 240,000 in October, much more severely than expected, analysts said the market had already taken into account the bad news. The U.S. unemployment rate jumped in October to 6.5 percent, the highest since March 1994. For September, the nation's unemployment rate was 6.3 percent.

Highlighting the impact of the economic downturn on the auto industry, General Motors and Ford both posted wider-than-expected quarterly losses. GM said liquidity will fall short of the minimum needed to run its business by the first half of next year without new funding or other drastic action.

GM sank 9.2 percent to $4.36, while rival Ford rose 2 percent to $2.02.

Exxon Mobil jumped 6.3 percent to $73.95, while Chevron added 4.8 percent to $73.46. U.S. front-month crude gained 27 cents to settle at $61.04 a barrel as the US dollar slumped.

On the Nasdaq, wireless technology supplier Qualcomm climbed 7.9 percent to $35.66 following quarterly results released after Thursday's closing bell that beat expectations.

Investors also snapped up shares of companies believed to be better positioned to weather a slowing economy, including utilities and pharmaceutical stocks. Johnson & Johnson, a Dow component, gained 4 percent to $60.22 on the New York Stock Exchange.

Wall Street received yet more evidence of a darkening economic picture late Friday morning. The National Association of Realtors Pending Home Sales Index, based on contracts signed in September, fell 4.6 percent, versus economists' forecast for a 3 percent drop.

Trading was moderate on the New York Stock Exchange, with about 1.26 billion shares changing hands, below last year's estimated daily average of roughly 1.90 billion, while on Nasdaq, about 1.93 billion shares traded, below last year's daily average of 2.17 billion.

Advancing stocks outnumbered declining ones on the New York Stock Exchange by a ratio of about 7 to 3 while on the Nasdaq, about 17 stocks rose for every 11 that fell.