Stocks rallied Friday, with the Dow Jones industrial average closing above 11,000 for the first time in more than five months, as a decrease in U.S. jobs bolstered speculation the Federal Reserve will buy more debt to stimulate the economy.
The Dow was up 57.90, or 0.53%, at 11,006.48. The last time the Dow closed above 11,000 was May 3. The S&P 500 was up 7.09, or 0.61%, at 1,165.15; and the Nasdaq composite rose 18.24, or 0.77%, at 2,401.91.
The Labor Department report that the nation lost 95,000 jobs last month was the latest evidence that the recovery from the recession might be faltering.
“The economy is still not creating jobs and the Fed is probably going to do quantitative easing,” said Barton Biggs, managing partner of hedge fund Traxis Partners, which oversees $1.4 billion. “It indicates that we’re still in this soft patch, and in order to get out of that and minimize the risk of a double dip, we need more fiscal and monetary stimulus.”
The number of jobs lost last month was 19 times the median estimate of economists in a Bloomberg survey. It was led by a decline in government payrolls that shows the damage being done by rising budget deficits.
Private payrolls that exclude government agencies climbed 64,000, less than forecast, underscoring the concern expressed by some Fed policymakers that the economic recovery may require an easier monetary policy. The unemployment rate held at 9.6% and has equaled or exceeded 9.5% for 14 consecutive months, the longest span of elevated joblessness since monthly records began in 1948.