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Dow Logs Highest Close Since May 2008

Friday, 3 Feb 2012 | 4:55 PM ET

Stocks ended near session highs Friday, with the Dow finishing at its best level since May 2008, buoyed by a monthly government employment report that blew past estimates and a handful of impressive economic news.

All three major averages logged impressive gains for the week.

The Dow Jones Industrial Average jumped 156.82 points, or 1.23 percent, to close at 12,862.23, its highest close in almost 3-1/2 years. The blue-chip index also logged its first triple-digit move since January 3. BofA and Caterpillar led the session's gainers.

The S&P 500 rallied 19.36 points, or 1.46 percent, to finish at 1,344.90. The Nasdaq soared 45.98 points, or 1.61 percent, to end at 2,905.66, hitting its highest since the tech bubble of 2000.

The CBOE Volatility Index, widely considered the best gauge of fear in the market, tumbled near 17.

For the week, the Dow climbed 1.59 percent, the S&P soared 2.17 percent, and the Nasdaq surged 3.16 percent. BofA was the best performer on the Dow this week, while P&G slipped.

All 10 S&P sectors ended in positive territory, led by financials and techs.

The economy created 243,000 new positionsin January, the largest increase since April 2011, according to a government report, blowing past estimates of 150,000. Meanwhile, the unemployment rate slipped to 8.3 percent. (Read More: Jobs Growth Raises Questions About Economy, Fed)

"Wall Street traders and investors have been waiting for a breakout macro point for years—this is it! Even the revisions are better, and have taken everyone by surprise," said Todd Schoenberger, managing director of LandColt Trading. "The real benefactor from this number will be those on extended benefits—companies will be eager to position some of that outstanding cash into the human capital component."

Market Rally for Real?
Mark Luschini, Janney Montgomery Scott, and Keith McCullough, Hedgeye Risk Management, discuss whether recent market optimism is justified.

A survey of small businesses showed hiring remained flat in January, while openings for hard-to-fill jobs increased slightly.

The pace of growth in the services sector posted a surprising acceleration in January, hitting its highest level in almost a year, according to the Institute for Supply Management. And factory orders climbed for a second month, according to the Commerce Department.

“We’re optimistic on the equity markets for the rest of the year—the economic data will continue to surprise to the upside as will earnings," said Paul Zemsky, CIO of multi-asset strategies at ING Investment Management. "Our sense is that there will be a little bit of congestion in the 1,350 area [on the S&P 500], but we’ll break through and hit 1,400 by the end of the second quarter.”

European shares ralliedafter UK services PMI jumped to a 10-month high. And negotiations over the Greek debt deal continued, with Greek Finance Minister Evangelos Venizelos warning that the European Central Bank must take part in Greece's hoped-for debt swap.

Meanwhile, rumors swirled that Greek Prime Minister Lucas Papademos may resign if talks for further austerity fail, which would jeopardize the whole bailout process.

Micron shares were halted following news that CEO Steve Appleton died in a small plane accidentin Boise, Idaho. Appleton served as CEO of the semiconductor firm from 1994.

The tragic news comes after President and COO Mark Durcan said last week he will retire at the end of August.

New York state Attorney General Eric Schneiderman accused JPMorgan Chase, BofA and Wells Fargo over 'deceptive' and 'fraudulent' foreclosure filings. Still, shares of the financial giants still held their strong gains.

On the earnings front, Tyson Foods gained after the meat processor posted earnings that easily topped estimates.

Genworth surged almost 15 percent after the insurer swung to a profit, as fewer Americans defaulted on the home loans it insures.

Gilead Sciences posted lower-than-expected earnings, but shares still jumped after the biopharmaceutical company announced promising early results from a trial of its experimental hepatitis C drug. At least three brokerages boosted their price targets on the firm.

Edwards Lifesciences slumped after the medical device maker posted revenue that fell short of forecasts.

And Estee Lauder posted results that met expectations, but shares of the skin-care products maker slumped after handing in an outlook that was below current projections.

Menawhile, Urban Outfitters jumped after the apparel retailer said Tedford Marlow will return to the company as CEO. This comes after the firm said co-founder Rich Hayne would replace Glen Senk as CEO in a surprise move last month.

A number of casual restaurant chains, ready-made food and beverage companies traded higher ahead of the Super Bowl gamethis Sunday. Buffalo Wild Wings , Boston Beer and Texas Roadhouse were up almost 3 percent each.

—Follow JeeYeon Park on Twitter: twitter.com/JeeYeonParkCNBC

On Tap Next Week:

MONDAY: Earnings from Hasbro, Humana, Yum Brands
TUESDAY: 3-yr note auction, consumer credit; Earnings from BP, Coca-Cola, Toyota, UBS, Disney, Hartford Financial, Panera Bread
WEDNESDAY: Mortgage applications, oil inventories, Fed's Williams speaks, 10-yr note auction; Earnings from Sanofi, CVS Caremark, Sprint Nextel, Time Warner, Cisco, Groupon, Visa, WholeFoods
THURSDAY: BoE announcement, ECB announcement, jobless claims, wholesale trade, 30-yr bond auction; Earnings from PepsiCo, Rio Tinto, Vodafone, Credit Suisse, Sirius XM Radio, Dunkin' Brands, Petrobras, Activision Blizzard, Expedia, LinkedIn
FRIDAY: International trade, consumer sentiment; Earnings from Barclays

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