|
Wall Street skyrockets
|
 |
November 5, 1999: 10:14 a.m. ET
Tame employment report alleviates interest rate hike jitters
|
NEW YORK (CNNfn) - U.S. financial markets soared at the start of trading Friday after the October employment report suggested inflation remains in check, calming investors' fears of an interest rate hike in the near future.
Shortly before 10 a.m. ET, the Dow Jones industrial average surged 187.48 points, or 1.6 percent, to 10,827.12. On the New York Stock Exchange advances outnumbered declines 1,690 to 556 as trading volume reached 99 million shares.
The Nasdaq composite index advanced further into record territory, rising 55.25 points, or 1.8 percent, to 3,111.20. The index posted its fifth consecutive record close Thursday at 3,055.95. The S&P 500 index jumped 22.95 points, or 1.7 percent, to 1385.59.
The bond market also rose sharply after the benign jobs report. The bellwether 30-year Treasury bond spiked 31/32 of a point in price, lowering its yield to 6.03 percent from 6.10 percent Thursday.
The dollar rose sharply against the yen and fell against the euro.
Investors cheer a tame report
Investors were comforted by the October payroll survey in which the economy created 310,000 new jobs and the unemployment rate dipped to a nearly 30-year low at 4.1 percent, according to the Labor Department.
Average hourly earnings, a component closely watched by the Federal Reserve, rose a mere 1 cent to $13.37 an hour, a smaller-than-expected increase.
The figures revealed steady job growth and limited inflationary pressures, and many investors feel the Fed will choose to remain sidelined at the its next monetary policy meeting on Nov. 16.
Jumbo drug merger saga continues
Meanwhile, investors kept close tabs on the drug merger drama after Warner-Lambert (WLA) rejected a surprise $82.4 billion merger offer from Pfizer (PFE) late Thursday, still favoring a $72 billion merger deal with American Home Products (AHP).
Warner-Lambert and American Home Products, two of the sector's leading companies, confirmed their agreement to merge Wednesday, and investors were caught by surprise Thursday when Pfizer made a counteroffer.
Either deal would be the largest in the pharmaceutical industry and sparked talk of more potential deals in the sector.
All three companies' shares retreated. Warner-Lambert edged ¾ lower to 89-1/4, American Home Products slumped 1-3/8 to 53-5/8 and Pfizer fell 1-1/4 to 36.
In earnings news, Walt Disney (DIS) sagged 1-1/2 to 25. The entertainment giant late Thursday reported fourth-quarter operating earnings before charges of $ 521 million, or 10 cents per share. Although the results were in line with expectations, it warned performance next year may not show much improvement.
|
|
|
|
|
 |
|
