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Wall St. takes high ground
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December 3, 1999: 3:21 p.m. ET
Benign jobs report triggers broad based gains; Nasdaq holds above 3,500
By Staff Writer Jill Bebar
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NEW YORK (CNNfn) - U.S. stocks posted strong gains in late trade Friday after a market friendly employment report suggesting inflation remains in check eased investors’ rate hike fears. All major indexes were at or near record levels, but they pulled back from earlier session highs.
"The party continues. The report was good news for bonds, and the markets welcomed it with a big hurray. It reinforces a strong year-end rally,” said Peter Cardillo, director of research at Westfalia Investments.
Shortly before 3 p.m. ET, the Dow Jones industrials surged 267.30 points, or 2.3 percent, to 11,306.36. On the New York Stock Exchange, gainers beat losers 1,834 to 1,192 as trading volume reached 786 million shares.
The Nasdaq composite rallied 71.94 points, or 2.0 percent, to 3,524.72 - piercing the 3,500 mark for the first time. The S&P 500 index gained 28.43 points, or 1.9 percent, to 1,437.47. (Click here for a look at today’s CNNfn hot stocks.)
Treasury prices rose sharply following the employment report release, with the bellwether 30-year bond gaining 27/32 of a point in price, lowering its yield to 6.25 percent from 6.32 percent late Thursday.
In the currency markets, the dollar was slightly higher against the euro, which rebounded from the below the $1 mark for the second straight day. The dollar fell slightly against the yen.
Tame inflation news calming
Investors cheered news that employment grew at a modest pace, suggesting that inflation remains in check. The U.S. economy added 234,000 new jobs in November, according to the Labor Department. The number was slightly above economists’ expectations of a 226,000 gain.
"The important thing for the financial markets today and the short term is that we dodged a bullet,” said Patrick Dimick, senior U.S. economist at Warburg Dillon Read. "The fundamental economic environment did not change in November.”
Analysts particularly liked the average hourly wages number, which rose 2 cents to $13.41 an hour, a smaller-than-expected increase. This component, a measure of inflation, is said to be closely watched by Federal Reserve Chairman Alan Greenspan. The next Fed monetary policy meeting is scheduled for Dec. 21.
"We have continued robust growth with surprising benign inflation. We avoided a disaster,” Dimick added.
Nasdaq passes 3,500
The employment report triggered broad-based gains. The Dow passed its previous record close of 11,326.04, set Aug. 25, before backing off, while the S&P remained above its record close of 1,424.94 set on Nov. 18.
"There is a general state of euphoria. It is the best looking rally we’ve had for quite some time,” said Ned Collins, head of trading at Daiwa Securities America.
Investors’ euphoria for the hot technology sector continued, pushing the Nasdaq further into uncharted territory above 3,500. This came one month to the day after the index closed above the 3,000 level for the first time. The composite index posted its 17th record close in the last 24 sessions Thursday at 3,452.78.
But many Internets gave back gains on Friday, especially among e-tailers. eToys (ETYS) eased 1-1/8 to 53-7/8. A survey released late Thursday ranked the Internet retailer above Amazon.com (AMZN) as the nation’s No. 1 online toy seller. Amazon also suffered, inching down 1/16 to 89.
On the skids was America Online (AOL), losing 1/2 to 79-1/2, but Yahoo! (YHOO) advanced 6-15/16 to 252-3/4.
Technology leaders fueled gains to U.S. blue chips. Microsoft (MSFT) rose 1-11/16 to 96-1/2, Hewlett Packard (HWP) jumped 6-1/8 to 105-7/8 and IBM (IBM) climbed 6-3/16 to 111-7/16. Banc of America Securities initiated coverage of IBM’s stock with a "buy” rating and a 12-month price target of $130, boosting the stock.
Financial shares upbeat
Financial shares gained ground, benefiting from the tame employment report. The sector is highly sensitive to interest rates due to the strong probability of borrowers defaulting on their loans when interest rates rise, therefore impacting corporate earnings negatively.
Chase Manhattan Corp. (CMB) rose 3-7/16 to 82-1/2 following Federal Reserve approval Thursday of the bank’s acquisition of Hambrecht & Quist Group, an investment bank.
Among the Dow components, American Express (AXP) advanced 4-9/16 to 158, Citigroup (C) jumped 3-1/4 to 57-1/4 and J.P. Morgan (JPM) added 4-3/4 to 137-1/4. 
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