NEW YORK (AP) - Wall Street's initial dejection over a bleak employment report dissipated Friday as the Labor Department's data raised investor hopes for further government measures to prop up the economy. Stocks turned sharply higher after showing steep losses in the first half of the session.
The Dow Jones industrial average, which had been down 258 points, rose more than 100 points by late afternoon. Broader indexes rose more than 1.5 percent.
The Labor Department's report that employers slashed 533,000 jobs in November was far worse than the 320,000 that economists forecast. Investors who originally sold on the news had a change of heart by afternoon, believing the numbers could make the government more likely to supply more aid for the economy. They also appeared relieved by the market's relatively cool reaction to the data - trading was orderly and the huge loss of jobs didn't spark the type of massive sell-off it might have even a month ago when Wall Street still trying to determine how severe the recession would be.
"In a kind of paradoxical sense, the really ugly employment numbers probably helped the case for more help from Washington, whether it's through the broader stimulus plan or more targeted industry measures," said Craig Peckham, equity trading strategist at Jefferies & Co.
Job losses were widespread, hitting manufacturing, construction, retail, financial and other sectors.
Beyond the hopes for more aggressive moves by the government, strength in the tattered financial sector also gave a boost to the overall market. An upbeat forecast from Hartford Financial Services Group Inc. cut through some of investors' fears that profits among financial firms would continue to spiral lower.
The company raised its profit expectations for the year and quelled some concerns about the strength of its balance sheet. Hartford stock jumped $7.01, or 97 percent, to $14.22. Other financials jumped. Wells Fargo & Co. rose 98 cents, or 3.6 percent, to $28.53, while National City Corp. rose 16 cents, or 8.9 percent, to $1.96.
In late afternoon trading, the Dow industrials rose 106.01, or 1.27 percent, to 8,482.25.
Broader stock indicators also advanced. The Standard & Poor's 500 index rose 13.07, or 1.55 percent, to 858.29, and the Nasdaq composite index rose 30.82, or 2.12 percent, to 1,476.38.
The Russell 2000 index of smaller companies rose 8.55, or 1.95 percent, to 448.08.
Three stocks rose for every two that fell on the New York Stock Exchange, where trading volume came to a light 962.9 million shares.
Bond prices tumbled as stocks turned higher. The yield on the benchmark 10-year Treasury note, which moves opposite its price, jumped to 2.66 percent from 2.56 percent late Thursday. The yield on the three-month T-bill, considered one of the safest investments, rose to 0.02 percent from 0.01 percent late Thursday.
The dollar was mixed against other major currencies, while gold prices fell.
Light, sweet crude fell $2.36 to $41.31 a barrel on the New York Mercantile Exchange. Concerns about the economy and weakening energy demand have kept oil prices near four-year lows. The price of oil has fallen a staggering 70 percent since peaking at $147.27 in July.
Independent investment strategist Edward Yardeni said Friday's employment snapshot confirms the nation is in a difficult recession but that the extent of the weakness likely will galvanize government officials.
"The number was a shocker to such an extent that it's clearly going to require an enormous stimulus response from Washington," he said. "Clearly, the Fed and the Treasury are going to move even faster."
The Federal Reserve and the Treasury have been taking unprecedented steps to revive the economy since the mid-September bankruptcy of Lehman Brothers Holdings Inc. The biggest move was the government's $700 billion rescue for the banking sector. The Treasury said Thursday it is considering a plan to encourage banks to make mortgage loans at low rates; that could help patch up the troubled housing market, which many analysts say is crucial to any economic recovery.
"In the perverse way that the market works, there's a hope that it further fuels the dire need for economic stimulus for the Street and for the consumer, with so many people out of work right now," said Ryan Larson, senior equity trader at Voyageur Asset Management.
Wall Street has reacted with both optimism and indifference in recent months as policymakers have tried to revive stagnant credit markets and stabilize wobbly banks. Some analysts have been hopeful that relative quiet in the markets for more than a week portends a return of some stability because of the government's efforts, while others warn that the volatility in the market will continue.
"The markets are, in my view, acting not stable at all but with excessive volatility and unpredictability," Townsend said. "It's a very difficult market to invest into and a very difficult market to trade."
While the deluge of bad economic readings
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