Stocks Close Higher Despite Weak Jobs Data

N E W  Y O R K, May 4 -- Stocks jumped after an early sell-off driven by surprisingly weak employment data, later gave way to a sense the bad news would compel theFederal Reserve to extend its aggressive interest-rate cuts.

The Dow Jones Industrial average rose 154.59 points,or 1.43 percent, to end at 10,951.24, according to the latestfigures, while the Nasdaq composite index added 45.38points, or 2.11 percent, to 2,191.58. The benchmark Standard &Poor's 500 index gained 18.02 points, or 1.44 percent, at1,266.60.

For the week, the Dow rose 1.3 percent, the Nasdaq improved5.6 percent and the broad S&P 500 gained 1.1 percent.

"The market is looking forward, and seeing a Fed cut incouple of weeks, perhaps a trough in earnings this quarter andperhaps better business conditions in the second half," saidGuy Truicko, equity portfolio manager at Unity Management,which oversees $1 billion. "That's what the market is going tocontinue to focus on — the end-game."

Stocks initially fell after the Labor Department reportedthe economy lost jobs in April at the fastest pace in a decade,raising concerns that growing joblessness will cause Americansto pull back on the spending that helped power 10 years ofexpansion.

The government reported a big drop of 223,000 in nonfarmpayrolls — compared to expectations for a gain of 5,000 jobs.It was the steepest drop since February 1991, just before thelast recession ended in March of that year.

The report also showed unemployment rose to 4.5 percent,its highest level since October 1998, while average hourlyearnings climbed 0.4 percent.

Among individual issues, software maker BEA Systems Inc.fell 9.7 percent, or $3.88, to $35.98, after DeutscheBanc Alex Brown analyst Jim Moore issued a cautious outlook onthe company past the first quarter.

Moore said he was concerned that several factors may hurtthe company's high share price valuation. "Valuation is stillour major concern, and we urge investors to be selective intiming," Moore wrote in a research note.