Wall Street and European stock markets rose Friday despite the news that unemployment in the US is running at a 14-year high, as the monthly jobs report turned out better than many investors had feared. Buyers returned to Wall Street Friday after two days of heavy losses, mindful of the economy's growing problems but attracted by stocks' lower prices. Analysts said the advance, which also came amid relief that a bad report on unemployment wasn't worse and followed dour third-quarter reports from Ford and General Motors, was to be expected as Wall Street experiences a rocky recovery from October's devastating selling. The major indexes jumped more than 2 percent, including the Dow Jones industrial average, which rose 250 points in light trading. For the week, the Dow and broader benchmarks like the Standard and amp; Poor's 500 index lost about 4 percent after surging 10 percent or more last week. The market briefly came off its highest levels of the session after President-elect Obama reiterated there is a great deal of hard work to be done to restore the economy to health. Investors had optimistically sent prices higher, only to temporarily pull back when Obama underscored what they already know: that the economy's problems won't be easily solved. The Dow rose 248.02, or 2.85 percent, to 8,943.81. The broader S&P 500 index added 26.11, or 2.89 percent, to 930.99, and the Nasdaq composite index rose 38.70, or 2.41 percent, to 1,647.40. The Russell 2000 index of smaller companies rose 9.95, or 2.01 percent, to 505.79. Advancing issues outnumbered decliners by more than 2 to 1 on the New York Stock Exchange, where volume came to a light 1.23 billion shares. For the week, the Dow fell 4.1 percent, the S&P 500 index lose 3.9 percent, the Nasdaq slid 4.3 percent and the Russell fell 5.9 percent. Despite the gains Friday, investors have not lost sight of the potential for a deep and protracted recession. Obama will inherit an economy marred by a housing collapse, mounting unemployment, hard-to-get credit and financial market upheaval when he assumes office early next year. European stock markets closed sharply higher Friday, getting a boost from gains on Wall Street as investors bet that a very weak US jobs report would prompt more interest rate cuts. London's FTSE 100 index of leading shares gained 2.17 percent to 4,364.96. The index on the London Stock Exchange had initially been reported to have closed with a gain of 2.69 percent at 4,387.14. But that figure was later re-calculated after an anomaly was discovered in the share movement of insurer Legal and General. In Paris, the CAC 40 index rose 2.42 percent to 3,469.12 points and in Frankfurt the DAX put on 2.59 percent at 4,938.46 points. George Shipp, chief investment officer at Scott and amp; Stringfellow in Richmond, Virginia, said Obama appeared to be trying to telegraph to the market not to expect too much immediately. Obama, noting that he has until January before taking office, said he will work to support an economic stimulus plan and will seek ideas for helping the auto industry. “My expectation is that he lowers the bar and buys the time,” Shipp said. “Certainly there is no reason to create any undue expectations right now.” That afternoon blip upward, retreat and move higher was a mini-version of the market's performance over the past two weeks, with investors turning upbeat, then realizing there was little basis in reality for their resurgent confidence, then changing their minds again. Hank Smith, chief investment officer at Haverford Investments said the market's turns aren't a surprise. “I think it's absolutely part of the bottoming process,” Smith said. “The Oct. 10 low has been tested again a number of times.” The blue chips hit an intraday low of 7,882.51 on Oct. 10.
