NEW YORK, (Reuters) – Stocks rose for a third day on Friday as investors looked past a disappointing jobs report and focused on growth elsewhere in the economy.
Gold jumped above $1,410 an ounce, however, forging its biggest weekly gain since April on lingering fears of a sprawling European debt crisis and after the U.S. jobs data sent the dollar tumbling 1 percent.
Stocks in Europe ended slightly lower, but analysts predicted the overall trend is for equity markets to push higher. The late-day U.S. stock gains in the face of a slack labor market suggested investors believed there could be gains into year-end, analysts said.
“Every other economic data point has been constructive,” said Phil Orlando, chief equity market strategist, at Federated Investors, in New York.
Wall Street’s recent rally only slowed after the Labor Department said U.S. businesses added 39,000 nonfarm payrolls in November, falling short of the 140,000 expected by economists. The unemployment rate rose to a seven-month high of 9.8 percent.
Overall employment for September and October was revised upward to show 38,000 more jobs created than first estimated.
Investors also expect the weak employment report will keep government support for financial markets in play.
“The Fed is not going to be able to abandon quantitative easing in the face of this weak jobs number,” said Orlando, referring to the central bank’s efforts to lower interest rates with the purchases of U.S. debt. “And if Congress thought they could begin to raise taxes at this point in the fragility of the economic cycle they are sadly mistaken,” he added.
The Dow Jones industrial average climbed 19.68 points, or 0.17 percent, to 11,382.09, near a four-week high. The Standard & Poor’s 500 Index rose 3.18 points, or 0.26 percent, to 1,224.71 and the Nasdaq Composite Index increased 12.11 points, or 0.47 percent, to 2,591.46.
The European benchmark FTSEurofirst 300 share index declined 0.2 percent to 1,103.97, following the earlier decline in U.S. shares. In Asia trading, the Nikkei closed 0.1 percent higher.
The MSCI world equity index knocked out a 0.82 percent gain to reach its highest since November 12.
Many analysts viewed the disappointing employment report as an outlier amid a slew of generally positive U.S. data released over the last few weeks that suggest traction for the economy.
Retailers this week reported much stronger-than-expected year-over-year sales in November. All-time highs for online sales on so-called Cyber Monday also illustrated strong holiday spending, galvanizing investor optimism.
“If people who are employed are spending money, the unemployment rate is not going to be as important,” said Charles Day, a financial adviser at Morgan Stanley Smith Barney in Purchase, New York.
“The mind-set people are in right now is to look for good news, and the good news of what’s happened over the last two days of the economy turning is overshadowing bad news. Investors are looking for reasons to be in the market.”
For the dollar, however, the U.S. jobs report injected enough caution to create a fresh downdraft on the currency.
The euro-zone debt crisis is expected keep the euro under pressure for some time. European authorities may have bailed out Ireland, but investors are speculating euro-zone nations such as Spain and Portugal will require assistance.
The dollar fell against a basket of major trading-partner currencies, with the U.S. Dollar Index .DXY down 1.4 percent at 79.179. The euro gained 1.43 percent to $1.3413.
Against the Japanese yen, the dollar slumped 1.49 percent to 82.62 yen.
U.S. Treasury prices were mixed as traders first bought bonds in reversal of short positions after the jobs data.
Other reports on Friday showed the U.S. services sector grew for an 11th straight month in November and new factory orders fell.
Benchmark 10-year Treasury notes fell slightly, and yields extended their climb to three days for the highest closing level since July 27.
European shares and the euro drew support among chatter that the European Central Bank was in the market for bonds from euro-zone nations in danger of rising borrowing costs and in possible need of bailouts.
In commodities, U.S. light sweet crude oil rose $1.35, or 1.53 percent, to $89.35 per barrel. Gold rose $29.50, or 2.13 percent, to $1413.70.