Jobs Data, GM Report Boost Stocks
N E W Y O R K, June 1 -- Stocks climbed ended higher following a late rally fueled by a surprising drop in the nation's jobless rate and a soothing financial outlook byauto giant General Motors.
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The blue-chip Dow Jones industrial average jumped78.47 points, or 0.72 percent, to end at 10,990.41, while thetech-loaded Nasdaq composite indexindex gained 38.95points, or 1.85 percent, to end at 2,149.44, based on thelatest data.
The benchmark Standard & Poor's 500 index added 4.85points, or 0.39 percent, at 1,260.67.
The U.S. Labor Department reported that the jobless ratefell to 4.4 percent in May from 4.5 percent in April, showingthe jobs market has held up better than expected. Economistshad predicted an uptick. The last time the jobless rate fellwas in September 2000.
GM gained $1.64 at $58.54. The world's largest auto makersaid U.S. vehicle sales including its Saab unit edged up 1percent to 459,050 vehicles in May, beating predictions of asales downturn. The automaker said it thought the currentanalysts' estimate for second-quarter earnings was"reasonable."
Jobs and Other Economic Reports
Although the percentage of people out of work dropped,trends in nonfarm payrolls remained weak, the government said.The number of workers on U.S. payrolls outside the farm sectorfell by 19,000 — a modest decline close to the 17,000contraction expected by economists in a Reuters poll.
"One would expect the Fed may not lower rates 50 basispoints based on these number," said Alan Ackerman, chief marketstrategist at Fahnestock & Co. "There's not a lot to crowabout. The big drop in manufacturing payrolls is stilldisturbing."
The National Association of Purchasing Management's monthlygauge of industrial activity slipped in May to 42.1 from 43.2in April, but remained above a decade low of 41.2 hit inJanuary.
A reading under 50 signals contracting manufacturingactivity, which comprises about 20 percent of the U.S. economy.The NAPM index has held under 50 for 10 months, but a smallimprovement since January had boosted hopes production couldrecover as companies work down their large inventories and neworders pick up.
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