U.S. stocks rose, with the Standard & Poor’s 500 Index approaching a record high, as data showed employers added more jobs than forecast last month and the unemployment rate unexpectedly dropped.
McDonald’s Corp. jumped 1.6% after the restaurant chain said store sales fell less than analysts estimated. Citigroup Inc. climbed 3.3% as it sought permission to buy back shares. Goldman Sachs Group Inc. lost 2.3% for the biggest decline in the S&P 500 after lagging behind peers in a measure of capital strength used by regulators. Pandora Media Inc. surged 19% as fourth-quarter revenue jumped.
The S&P 500 rose 0.4% to 1,550.75 at 3:31 p.m. in New York. The Dow Jones Industrial Average increased 58.31 points, or 0.4%, to 14,387.80. Trading in S&P 500 stocks was 7.5% lower than the 30-day average.
“People are starting to hire, and in fact they have been hiring for a few quarters,” Carla Ann Harris, managing director and senior client advisor at Morgan Stanley, said in a television interview on Bloomberg’s “Market Makers.” “Some of the caution with respect to the payrolls is starting to abate. You’ll probably see a faster pace as people start to move towards growth as opposed to maintaining the status quo because of the uncertainty they feel in the market.”
Employment rose 236,000 last month after a revised 119,000 gain in January that was smaller than first estimated, Labor Department figures showed today in Washington. The median forecast of 90 economists surveyed by Bloomberg projected an advance of 165,000. The jobless rate dropped to 7.7%. Hiring in construction jumped by the most in almost six years.
The S&P 500 has rallied 2.1% this week, on course for the biggest gain in two months, as jobless-benefit claims fell to a six-week low and investors speculated that central banks will continue with stimulus measures. The benchmark equity gauge is less than 1% below the record of 1,565.15 reached in October 2007 and the Dow is at an all-time high.
About 82% of stocks in the S&P 500 yesterday closed above their average price from the past 50 days, according to data compiled by Bloomberg.
The Federal Reserve has embarked on three rounds of stimulus to boost the economy and Chairman Ben S. Bernanke has pledged to continue to buy bonds until the U.S. labor market improves. Minutes from the Federal Open Market Committee’s January meeting showed policy makers were divided about the strategy and some officials said an earlier end to purchases might be needed.