ABC News
Major Stock Indexes Close Week With Gains
Major Stock Indexes Close Week With Gains; Dow Less Than 150 Pts. Away From All-Time High
Traders crowd a post on the floor of the New York Stock Exchange, Friday May 5, 2006. Stocks surged in early trading Friday as a new report showing moderating job growth reinforced Wall Street's hopes that the Federal Reserve may soon end its series of interest rate hikes. (AP Photo/Richard Drew)
By CHRISTOPHER WANG AP Business Writer
NEW YORK May 5, 2006 (AP)— Wall Street barreled higher Friday, sending the Dow Jones industrials up 138 points to a new six-year high after a report of modest job growth bolstered hopes that the Federal Reserve will end its interest rates hikes. All three major indexes finished the week with gains.
Investors saw a slowdown in April employment growth as the latest sign of a softening economy, a reason for the Fed to stop raising interest rates. That countered worries over rising wages, which followed an upswing in employers' labor costs on Thursday.
Jack Caffrey, equities strategist for JPMorgan Private Bank, said the market appeared to be focusing on recent positive data instead of considering the long-term consequences of why the Fed would stop boosting rates because economic growth has slowed enough to contain inflation.
"People are taking the weaker job creation, the stability in the unemployment rate and the uptick in jobless claims and spinning that into a hope the Fed will move to the sideline sooner than later," Caffrey said. "It's almost a hope-for-relief rally instead of a 'the Fed is done, things are slowing down' mentality."
Falling oil prices also helped stocks to their gains, although some believe higher gasoline prices will pressure consumer spending and keep the economy from overheating.
The Dow rose 138.88, or 1.21 percent, to 11,577.74, its best showing since the Dow reached its all-time high of 11,722.98 on Jan. 14, 2000. The Dow is now just 145.54 away from setting a new record.
Broader stock indicators were higher. The Standard & Poor's 500 index gained 13.51, or 1.03 percent, to 1,325.76, its highest level since Feb. 15, 2001; the Nasdaq composite index advanced 18.67, or 0.8 percent, to 2,342.57. The S&P; remains 13.2 percent away from its all-time high, while the Nasdaq is 53.6 percent lower than its 2000 record.
Advancing issues led decliners by a robust 3 to 1 margin on the New York Stock Exchange, where final consolidated volume of 2.47 billion shares lagged the 2.5 billion shares traded Thursday.
