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NEW YORK, March 11 (AFP): Wall Street shares rallied Friday as a robust US monthly payrolls report reassured investors the economy was on track even if it left little doubt about the likelihood of rising interest rates.
After a hesitant start for the main indexes, the Dow Jones Industrial Average jumped 97.74 points (0.89 per cent) to 11,070.02 and the Nasdaq composite added 12.56 points (0.56 per cent) to 2,262.28 at 1630 GMT.
The broad-market Standard and Poor's 500 index advanced 9.04 points (0.71 per cent) to 1,281.27.
The Labor Department reported that US nonfarm payrolls increased by a better-than-expected 243,000 in February. Hourly earnings, a component closely monitored by the Federal Reserve in making rates decisions, rose 0.3 per cent.
Jim Awad, chairman of Awad Asset Management, said the hesitant opening was a result of a "tug of war" between those who see strong economic growth as positive for corporate profits and those who fear inflation.
"The case is here that we have a strong economy, we're creating jobs, wages are going up. That means for the time being corporate profits are in good shape" he said.
Awad said the negative side of the jobs data is that it raises the risk that the Fed is going to have to raise rates over a longer-than-expected period, increasing the risk at some point down the road that they will begin to affect the economy negatively.
"But for the moment it looks like it's breaking on the side of the bulls," he said. "In other words, let's not worry about the future negative effect of interest rates but let's enjoy the current strong economic growth we're experiencing and let's reflect that in stock prices."
John Silvia, chief economist at Wachovia Securities, said the report "suggests good economic growth."
"Job gains combined with wage improvements suggest personal income growth will sustain consumer spending in the period ahead," he said.
The report impacted the bond market, which has been in turmoil of late over fears about inflation and higher interest rates.
The yield on the 10-year US Treasury bond jumped to 4.767 per cent from 4.730 per cent Thursday and that on the 30-year bond climbed to 4.753 per cent against 4.723 per cent. Bond yields and prices move in opposite directions.
Among stocks in focus, Citigroup rose 50 cents to 46.99 after a French magazine reported that a large US bank has contacted the French government about the possibility of making an offer for a bank in that country. The magazine believes it to be Citigroup, with shares of Societe Generale moving higher in Paris.
Microsoft added four cents to 27.04 as the software giant unveiled a new Ultra Mobile PC (UMPC) and faced possible additional fines from the European Commission over antitrust violations.
Google fell 1.95 to 34.105 after the Internet giant acquired a privately held company operating the online documents site Writely in a possible challenge to Microsoft.
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