Stocks rally despite job losses

Bets on the new version of the bank bailout and the economic stimulus plan help investors look beyond the brutal January report.

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By staff

Your $$$
Ali Velshi is at the Chicago Mercantile Exchange for a Special Edition of Your $$$$$.
Among this week's topics:
What the stimulus means for you
Job creation: Will stimulus work?
Talking to kids about tough times
Guests include:
Diane Swonk, Chief Economist at Mesirow Financial
Terry Savage, Personal Finance Editor at the Chicago Sun Times
Janet Bodnar, Editor of Kiplinger's Personal Finance Magazine
Tune in Saturday at 1 p.m. ET and Sunday at 3 p.m. ET.

NEW YORK( -- Financial stocks rallied Friday morning, pushing the broader market higher as investors accepted massive January job losses, and tried to look ahead to the government's stimulus plan and new version of the bank bailout.

The Dow Jones industrial average (INDU) added 106 points, or 1.3%. The Standard & Poor's 500 (SPX) index added 11 points, or 1.4%. The Nasdaq composite (COMP) added 26 points or 1.7%.

Jobs: In its monthly reading on employment, the Labor Department reported that the nation's economy lost 598,000 jobs in January, representing the biggest loss since December 1974. The rate of unemployment climbed to 7.6%.

That number was much worse than economists were anticipating. Consensus estimates were for employers to cut 540,000 jobs after dropping a revised 577,000 in December. The unemployment rate was expected to climb to 7.5%.

Stimulus: The Senate is set to resume deliberations Friday morning over a nearly $900 billion stimulus bill. Lawmakers generally agree that an economic recovery package is required but there are concerns about the size of the bill and some of its measures.

President Obama is also expected to name members of his Economic Recovery Advisory Board Friday. The panel, which will be headed by former Federal Reserve chairman Paul Volcker and made of a mix of leaders from the business world, will advise the White House on reviving the ailing U.S. economy.

Bank bailout: Treasury Secretary Tim Geithner is expected to detail the Obama administration's strategy for reviving the banking system on Monday. Several options have been under discussion, including a government-funded "bad bank" that would remove toxic assets from bank balance sheets.

Corporate results: After the market close Thursday, News Corp. (NWS, Fortune 500) reported a quarterly loss of $8.4 billion. Excluding charges, the media conglomerate reported earnings of 12 cents per share, which was short of Wall Street's estimates.

Toyota Motor (TM) warned of a much bigger yearly loss Friday, hurt by a sharp decline in automotive sales around the globe. The Japanese firm said it expects to report an operating loss of $4.95 billion when it reports its full-year results in March.

World markets: Global stocks mostly rose, boosted by hopes that the U.S. was close to taking more steps to bolster its economy. In Asia, the Nikkei and Hang Seng rallied. Stocks in London, Paris and Frankfurt rallied in afternoon trading.

Oil prices tumbled below $40 a barrel Friday, falling $1.87 to $39.30 a barrel on the New York Mercantile Exchange.

In currency trading, the dollar declined against the euro and gained against the yen. To top of page

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