Stocks posted the best weekly gains in three weeks, closing up Friday as new economic data showed moderate jobs growth, easing worries of a slowing economy.
"The jobs number was pretty decent, it was probably as good as we could have expected," said Charles Rotblut, senior market analyst at Zacks.com. "The numbers weren't up enough to spark Fed worries and, with the ISM number on Monday, painted a picture of stronger economy."
The Dow Jones Industrial Average rose 45 points on Friday, or 0.3% while the S&P 500 ended about 9 points below the all-time high of 1539 recorded on June 4. The Nasdaq Composite ended with modest gains.
For the week, the Dow rose 1.4%, the S&P 500 gained 1.6% and the Nasdaq posted a weekly gain of 2.2%.
"We've got all three legs: a lot of global liquidity, we've got decent earnings growth from corporations ... and reasonable valuations," said Liz Miller, managing director at Trevor Stewart Burton & Jacobsen. "I think we've had quite a run so we could go sideways for a while, but my longer term view is very positive."
Breadth was mildly positive on Friday with advancing stocks outpacing declining stocks by three to two on the NYSE. Eight of the ten S&P 500 sectors traded higher. Buying in information technology and industrials helped to lift stocks off earlier lows, however, the real leadership was in the energy sector, which gained 1.0% on oil prices trading at 11-month highs.
Energy stocks were also the best weekly sector performer with gains of 3.8%. Integrated oil giant Chevron posted a weekly gain of 4.1% while rival Exxon Mobil rose 3.1%. Other sector winners included basic materials, which posted a weekly gain of 3.2%, as well as technology, which rose 2.3%.
The Labor Department said Friday morning that non-farm payrolls, the most closely watched measure of the U.S. labor market, rose in June by 132,000, topping economists' consensus forecast of 125,000. The government also issued upward revisions to employment figures from April and May, with a net addition of 75,000 jobs.
"The revisions were particiualrly strong," noted Zacks.com's Rotblut.
Bond traders reacted negatively to the data, sending Treasury yields higher.
"Bonds sold off on the economic news, which was stronger than expected," said Tom Schrader, managing director of US-listed trading at Stifel Nicolaus. "The stock market is shrugging off the negative action in the bond market."
Caterpillar was the best percentage gainer in the Dow, which saw 19 of 30 components close with gains.
New York light sweet crude futures closed above $72 a barrel on news of renewed violence and kidnappings in Nigeria, Africa's largest oil exporter.
Chicago Mercantile Exchange Holdings said it has increased the amount CBOT shareholders will receive as part of an agreed takeover. CME said CBOT shareholders will now receive 0.375 shares for each of their shares, up from the 0.350 offered under the original deal.
Advanced Medical Optics offered to buy eye-care company Bausch & Lomb for $4.23 billion Thursday, trumping a rival offer from private-equity firm Warburg Pincus.
Shares of UBS were active after the company removed CEO Peter Wuffli and replaced him with his deputy, Marcel Rohner. The move comes after the collapse of a hedge fund and other setbacks.
Microsoft said it will take a $1 billion charge to pay for a new extended warranty program for the Xbox 360 games console. Meanwhile, rival videogame maker Sony said on Friday it has no current plans to cut the price of its PlayStation 3 console to boost demand.
European Stocks Trade Higher
European stock markets traded higher.
The London FTSE-100 , the Paris CAC-40 and theFrankfurt DAX were all higher.
Strategy was topping the agenda for Imperial Chemical Industries (ICI), which requested the U.K. Takeover Panel to force Dutch conglomerate Akzo Nobel to make a higheroffer for the chemicals group or rule out the possibility, London's the Financial Times reported Friday. ICI rejected a bid of 7.4 billion pounds, ($14.8 billion) from Akzo Nobel last month.
Meanwhile, Nestle warned that a "significant and long-lasting" period of rising food prices could be on the cards due to increased demand from China and India, coupled with the developing bio-fuel market. Shares in the world's largest food group gained.
And Peugeot Citroen said worldwide vehicle sales were flat in the first half of 2007, but shares in the French car maker rose.
Asian Markets Mixed
Asian markets were mixed in the afternoon session Friday with Japan and Australia closing lower, but South Korea ending stronger as strong U.S. data on jobs and services dimmed hopes of a U.S. rate cut.
Tokyo's Nikkei 225 Average closed weaker in slow trade as investors took profits in Canon and other recent gainers following a six-day winning streak. Fast Retailing gave up early gains to finish down 1.1%. The clothing retailer launched an unsolicited bid to acquire Barneys New York for $900 million, topping an existing deal for the upscale clothing chain.
In South Korea, share were higher, as a rise in chip makers following a brokerage's ratings upgrade of Hynix Semiconductor lifted the Kospi Index. But gains were capped by growing expectations that the central bank would raise interest rates next week.
Chinese shares saw a sharp rise towards the end of the Asian session with the Shanghai Composite Index gaining 4.6%, pulled higher by blue-chip financial companies.
Hong Kong blue chips reversed course to steer into positive territory as investors bought laggards like Hutchison Whampoa and Cheung Kong, which were bolstered by broker