employment report for April, eyeing a better-than-expected factory orders read.
The Dow Jones industrial average was up 128.43 points, or 1.52%, to 8,582.68. The broader Standard & Poor's 500-stock index rose 13.78 points, or 1.5%, to 930.08. Meanwhile, the tech-laden Nasdaq composite index added 30.32 points, or 2.06%, to 1,502.88.
The Nasdaq reached its highest closing level since June, 2002, though it still did not reach its intraday high of 1,521 posted on Dec. 2. The S&P index closed at its highest level since hitting 931 on Jan. 14.
Investors were greeted with a glum, but anticipated, update on the U.S. labor market. U.S. nonfarm payrolls fell 48,000 in April after a downwardly revised 124,000 drop in March, while February was revised lower to 353,000 from down 308,000.
The unemployment rate rose to 6% in April from 5.8% in March. Average hourly earnings rose 0.1%, and the average hours worked component slipped from 34.3 hours to 34.0 hours.
In other economic news, U.S. factory goods orders jumped 2.2% in March, after falling a revised 1.0% in February.
Economic research firm MMS International took a downbeat view of the employment news. "The sharp pullback in the hours-worked component, combined with disappointing April auto sales, sets the tone for another month of weak economic data despite initial hopes that we would begin to see some rebound from the weather and war weakness seen over the two prior months," notes MMS.
Next week is expected to be relatively light in terms of economic data reports. The highlight will be the Federal Reserve's Open Market Committee meeting on May 6. Despite deterioration on the labor front, the Fed is unlikely to resort to an interest-rate cut, according to Standard & Poor's MarketScope.
However, "the downgrade in the economic outlook suggests increased risk or a cut later this year, especially if the data remain weak," MMS notes. "However, our best guess is that the Fed remains on hold through 2003."
Few major companies reported quarterly earnings Friday. Investors, however, got the latest from Dow member Walt Disney (DIS
). After Thursday's market close, the entertainment and media giant posted a fiscal second-quarter net profit of $229 million, or 11 cents per share, which was in line with analysts' average forecast.
Rising oil and gas prices helped ChevronTexaco (CVX
) double first quarter profits.
Insurer Cigna (CI
) saw shares fall Friday, after it announced a first quarter EPS loss.
On Friday, the parent of bankrupt carrier United Airlines, UAL (UALAQ
), reported a $1.3 billion quarterly loss.
On a more optimistic note for the airline sector, Merrill Lynch issued upgrades of Frontier Airlines (FRNT
), Northwest Airlines (NWAC
), Delta Air Lines (DAL
), and Continental Airlines (CAL
). Shares of most industry members were higher Friday.
Among large companies slated to report quarterly earnings next week: Cisco (CSCO
), Gillette (G
), and Electronic Data Systems (EDS
Prices of U.S. Treasuries finished lower Friday, as stocks climbed to recent highs. Traders took profits ahead of next week's FOMC meeting and Treasury refunding. The benchmark 10-year note's yield was 3.92%.
Employment data, while negative, was not as disappointing as expected. According to economic research firm MMS International, the uncertainty makes a Fed rate cut at Tuesday's FOMC meeting more unlikely.
European markets finished trading higher Friday. London's FTSE index rose 72.5 points, or 1.87%, to 3,952.6. Frankfurt's DAX index was up 43.96 points, or 1.49%, to 2,986, on strength in U.S. markets. The DAX had slid earlier in the session on a weak retail sales report. In Paris, the CAC 40 index gained 9.45 points, or 0.32%, to 2,963.12.
In Asia Friday, Japan' Nikkei average finished up 43.9 points, or 0.56%, at 7,907.19. Hong Kong's benchmark Hang Seng index rose 90.96 points, or 1.04%, to 8,808.18.