US Stocks End Higher on Jobs Report

he U.S. economy’s most vexing problem, unemployment, is showing the first signs of easing. And Wall Street is celebrating. Major stock indexes barreled higher by more than 1 percent Friday after the government said the nation’s unemployment rate unexpectedly fell in July for the first time in 15 months and that employers cut fewer jobs.

The Labor Department report handed investors the best evidence yet that the economy could be climbing out of the recession. Analysts widely consider unemployment the biggest obstacle to a recovery in the economy, which is driven by consumer spending.

The surprise figures injected new life in a monthlong rally and provided validation for traders who have been betting since March that the economy is healing. The Dow Jones industrial average rose 114 points to cap its fourth straight weekly gain. The Dow is at its highest level since early November.

The government said employers shed 247,000 jobs in July, the fewest in a year. Economists had expected 320,000 lost jobs. The unemployment rate dropped to 9.4 percent from 9.5 percent in June, rather than rising to 9.6 percent as forecast.

“It really gave the market the proof that it needed to see,” said Burt White, chief investment officer at LPL Financial in Boston. The report is often the most anticipated bit of economic news each month on Wall Street and nervousness about what it would reveal held stocks to modest moves most of the week.

The exception came Monday when Ford Motor Co. said its monthly sales rose for the first time in nearly two years because the government’s cash for clunkers program was drawing customers. That, and good news about manufacturing, construction and banking, sent the Standard & Poor’s 500 index over 1,000 for the first time in nine months.

With the pop Friday, the S&P 500 index is up 14.9 percent in only four weeks and 49.4 percent from a 12-year low in early March. Still, some analysts say the gains have come too quickly and question whether an economic rebound can ever live up to the expectations investors are now setting.

“We’ve run very fast, very quickly,” said Marc Harris, co-head of global research for RBC Capital Markets in New York. “I think we’re due to take a breath.”

According to preliminary calculations, the Dow rose 113.81, or 1.2 percent, to 9,370.07. The broader S&P 500 index gained 13.40, or 1.3 percent, to 1,010.48, while the Nasdaq composite index rose 27.09, or 1.4 percent, to 2,000.25.

About 2,300 stocks rose on the New York Stock Exchange, while about 700 fell. Volume came to 1.5 billion shares, compared with 1.4 billion Thursday.