New York: A surge in hiring in the world's largest economy last month drove the Nasdaq to an 11-year high on Friday as optimism grew that the labour market is on a steady path to recovery.
The broad-based gains on solid trading volume also sent the Dow Jones industrial average near a four-year high. The S&P 500 extended its 2012 advance to about 7 per cent and was at its highest level in more than six months.
The US economy created jobs at the fastest pace in nine months in January and the unemployment rate dropped to nearly a three-year low of 8.3 per cent, the government said.
Genuine strength
"It is really hard to find something not to like in the jobs report," said Andrew Goldberg, market strategist at JP Morgan Funds in New York. "There is genuine strength in this report with broad-based jobs creation."
While the news was positive, it will take more months of substantial job gains to maintain momentum in a market that has risen more than 25 per cent since October lows.
"There is no doubt that no matter how good this report is, this is still a lukewarm jobs recovery," Goldberg said. "There is a long way to go for this economy."
More than 450 stocks across all sectors hit 52-week highs, including Apple, United Parcel Service, Yum Brands and MasterCard. The number of NYSE stocks making new 52-week highs was at it highest since July.
Wayne Kaufman, chief market analyst at John Thomas Financial in New York, said he was having a hard time identifying stocks that did not show signs of being overextended.
"Seventy four per cent of stocks are over their own 200-day moving average. Those are bull-market statistics," he said.
Consumer discretionary shares and other stocks tied to an expanding economy led gains. Financial shares rose 2.7 per cent, while industrials and discretionaries added 1.7 per cent to 2 per cent.
In another report signaling strength, the pace of growth in the services sector unexpectedly accelerated in January to its highest level in nearly a year.
The Dow Jones industrial average gained 156.82 points, or 1.23 per cent, to 12,862.23. The Standard & Poor's 500 Index rose 19.36 points, or 1.46 per cent, to 1,344.90. The Nasdaq Composite Index added 45.98 points, or 1.61 per cent, to 2,905.66.
Signs of an improving economy and an absence of bad news from Europe have helped Wall Street stocks rally since last year. But analysts caution that the market is still susceptible to risks such as a flare-up in Europe's debt crisis or geo-political uncertainty in the Middle East that could generate an oil price shock.
For the week the S&P ended up 2.2 per cent for its fifth week of gains in a row. The Dow rose 1.6 per cent and the Nasdaq also advanced for a fifth straight week, up 3.2 per cent for the best week since early December.
