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Wall Street ends volatile week with a gain

By wire services
Published July 9, 2005

NEW YORK - Wall Street ended an unusual and volatile week on a bullish note Friday, with the Dow Jones industrials gaining more than 146 points on the strength of a positive job creation report and a sharp drop in oil prices.

As European markets surged higher one day after the deadly terrorist bombings in London, Wall Street welcomed the Labor Department's jobs report. While the 146,000 jobs created in June were less than the 195,000 economists had hoped for, the unemployment rate fell to 5 percent from 5.1 percent in May, and hourly earnings rose 0.2 percent. Those figures encourage consumer confidence, analysts said.

Combined with falling oil prices, the employment news was enough to encourage Wall Street's two main camps. Those who fear inflation were happy with only a modest rise in job growth and wages, while those worried about a slowdown in the economy could point to another sign of steady - although slower - growth.

The move higher capped a remarkable week on Wall Street, which saw fear of rising oil prices replaced by a resolve in the wake of the London terror attacks.

"I think the shock of $60 oil has worn off, and the market is focusing on the jobs report," said Russ Koesterich, senior portfolio manager at Barclays Global Investments in San Francisco.

At least part of the unemployment decline was a result of having 240,000 workers leave the labor force. Some of those people had become discouraged after searching for work, while others were teachers and students who had left the workplace for the summer.

The report showed that professional and business service employment grew by a robust 56,000 jobs.

The construction industry, which has benefited from the nation's housing boom, added 18,000 jobs for the month and 282,000 jobs in the past year.

But there was weakness at the nation's factories, which shed 24,000 jobs, far exceeding the loss of 5,000 jobs that economists had predicted.

Much of the decrease came from the auto industry, which lost 18,000 jobs as it slowed or temporarily halted production lines to work off excess inventory.

The oil price retreat also buoyed investors, as the Dow rose 146.85, or 1.43 percent, to 10,449.14.

Early on, crude futures prices rose as high as $61.90 per barrel on the New York Mercantile Exchange, with traders focusing on Hurricane Dennis' approach in the Gulf of Mexico.

However, the rally lost steam amid speculation that the power of the hurricane might not be as intense as originally feared.

Light, sweet crude for August delivery dropped by $1.10 to settle at $59.63 per barrel on Nymex.

Information from the Associated Press and the New York Times was used in this report.

[Last modified July 9, 2005, 01:30:12]