June 7 - Summary: Stocks snap a two-week losing streak as Wall Street receives what it was looking for: job growth strong enough not to add to economic jitters but weak enough to take away fears the Federal Reserve is close to closing the piggy bank; J.C. Penney remakes home in retail makeover. Conway G. Gittens reports.
Stocks avoid what could have been a third down week in a row as jobs data come in stronger than anticipated. A 200-point gain for the Dow made this its second best day of the year. The rest of the market - also up more than one percent. For the week: blue chips rose 0.9 percent, while the Nasdaq rebounded by four-tenths of one percent. It all came down to jobs. The U.S. economy added 175,000 new jobs in May, which was ahead of forecasts. The unemployment rate rose to 7.6 percent as once-discouraged Americans started looking for work again. White House economic advisor Alan Kreuger: SOUNDBITE: ALAN KREUGER, CHAIRMAN, WHITE HOUSE ECONOMIC ADVISERS (ENGLISH) SAYING: "The economy's been adding jobs for 39 months in a row now. So far this year we've added almost 1 million private sector jobs. That's progress." Many economists say the report was strong enough to ease fears the economy was shifting into reverse, but not strong enough to suggest the Federal Reserve can remove the $85 billion a month in extra stimulus. The bond market, however, still thinks the Fed will start scaling back some of that aggressive stimulus - yields on the 10-year note jumped on Friday. High-yield debt, aka junk bonds, already bearing the brunt. A record $4.6 billion came out of junk bond funds last week, says Lipper's Tom Roseen. SOUNDBITE: TOM ROSEEN, HEAD OF RESEARCH SERVICES, LIPPER FUNDS (ENGLISH) SAYING: "People are basically considering the fact the Fed will probably start getting rid of some of their quantitative easing - tapering as everyone has been calling it. This is causing people to think that interest rates will rise even higher and so that bodes well for going into other types of securities without as much risk." In company news, J.C. Penney is hoping home will be the place where revival is. The struggling department store has completed a makeover for its home goods section, which before falling on hard times, made up one-fifth of all store revenues. Shelves with be stocked with names like Martha Stewart, Michael Graves, and Jonathan Adler. Shares of J.C. Penney jumping 3.2 percent in Friday trade. The U.S. jobs numbers went over well in Europe stock with major indices rallying anywhere between 1.2 and 1.9 percent.