U.S. stocks ended higher today, rallying from an early deficit tied to a report that U.S. payrolls shedded more than a half-million jobs in November, the largest one-month drop since December 1974.
The Dow Jones industrial average closed up 259.18, or 3.09%, at 8,635.42; the S&P 500 rose 30.85, or 3.65%, closing at 876.07; and the Nasdaq composite was up 63.75, or 4.41%, to close at 1,509.31. All numbers are preliminary.
At one point, the Dow was down more than 250 points on the gloomy news. Traders attributed the rebound to news that insurer Hartford Financial Services Group Inc. raised its earnings guidance for 2008, which was seen as a sign the Federal Reserves massive injection of liquidity is starting to stabilize the financial sector.
The Department of Labor announced that 533,000 payroll jobs were lost last month, much worse than Wall Street consensus, which had called for a loss of 330,000 jobs.
The jobless rate climbed to 6.7% last month from 6.5% in October.
In December 1974, when the economy lost 602,000 jobs in one month, the unemployment rate stood at 7.2% and peaked at 9% in May 1975 when job growth resumed. A total of 2.2 million jobs were lost during the 1973-75 recession, prompted by an oil price shock.
Economists also noted that the worst declines in the job market usually occur in the second half of a recession this one already being a year old.