U.S. stocks rose, sending the Dow Jones Industrial Average above 15,000 for the first time, as employment picked up more than forecast in April and the jobless rate unexpectedly declined to a four-year low.
Caterpillar Inc. and General Electric Co. rallied more than 2.3% to lead the Dow. Kraft Foods Group Inc. increased 5.9% as first-quarter profit beat estimates. American International Group Inc. climbed 5.8% as operating earnings surpassed projections. LinkedIn Corp. tumbled 9.1% after forecasting second-quarter sales that missed analysts’ predictions.
The Standard & Poor’s 500 Index rallied 1.3% to 1,617.65 at 10:44 a.m. in New York, topping 1,600 for the first time. The Dow advanced 174.98 points, or 1.2%, to 15,006.56. Trading in S&P 500 stocks was 15% above the 30-day average during this time of day.
“This is an outstanding jobs report,” Darrell Cronk, the New York-based regional chief investment officer at Wells Fargo Private Bank, which oversees $170 billion, said by phone. “The data is strong enough to confirm that the expansion is intact, and the bones of this recovery are where they need to be.”
Payrolls expanded by 165,000 workers last month following a revised 138,000 increase in March that was larger than first estimated, Labor Department figures showed today in Washington. The median forecast of 90 economists surveyed by Bloomberg projected a 140,000 gain. Revisions to the prior two months’ reports added a total of 114,000 jobs to the employment count in February and March.
The jobless rate dropped to 7.5%, the lowest level since December 2008, from 7.6% in March.
Other reports today showed orders placed with U.S. factories fell more than forecast in March as a cooling economy slowed demand for metals, mining equipment and military goods. The Institute for Supply Management’s non-manufacturing index decreased to 53.1 in April from 54.4 a month earlier, the Tempe, Arizona-based group said.
Concern over a slowdown in the world’s largest economy had increased as a report May 1 showed manufacturing expanded in April at the slowest pace this year. Data last week indicated the U.S. economy grew less than forecast in the first quarter.
The euro-area economy will contract more than previously expected in 2013, the European Commission said in new forecasts today. Gross domestic product in the 17-nation region will fall 0.4% this year, compared with a February prediction of a 0.3% drop, the Brussels-based commission said.