Stocks Rally; Dow Tops 14000

NEW YORK - Fresh off a blowout January, stocks started February with a bang.

The Dow industrials topped 14000 for the first time since 2007, capping their fifth-straight weekly gain, following encouraging data on US jobs and manufacturing.

The Dow Jones Industrial Average advanced 149.21 points, or 1.1%, to 14009.79 Friday, climbing above 14000 for the first time since Oct. 12, 2007.

The Standard & Poor's 500-stock index rose 15.06 points, or 1%, to 1513.17, a day after capping a 5% monthly gain, the biggest since October 2011. Telecommunications shares in the S&P 500 led gains across all 10 of the index's sectors. The Nasdaq Composite Index climbed 36.97 points, or 1.2%, to 3179.10.

US employers added 157,000 jobs in January, the Labor Department reported, falling short of the 166,000 new payrolls predicted by economists in a Dow Jones Newswires poll. But the department said the economy added an average of 181,000 jobs a month last year, better than the 153,000 pace originally reported, as it revised initial readings for November and December higher.

Last month's unemployment rate, obtained in a separate survey of US households, edged up to 7.9% from 7.8% in December. Economists had predicted it would remain unchanged. Average hourly earnings rose 0.2%, in line with economists' views.

Elsewhere on the economic front, the Institute for Supply Management's January manufacturing purchasing managers' index, a measure of factory activity, rose more than economists had expected. A preliminary reading of the Thomson-Reuters and University of Michigan consumer-sentiment index for January also rose more than expected. Construction spending for December increased.

European markets were mostly higher, with the Stoxx Europe 600 up 0.3%, after Markit's euro-zone purchasing managers' index contracted at the slowest rate in 11 months. Spanish stocks bucked the trend by selling off after a ban on short selling, or betting against shares, was lifted. The IBEX 35 index dropped 1.6%.

FOREX:

The euro hit a 14-month high against the dollar Friday after US jobs data suggested there was no near-term end in sight for the Federal Reserve's easy credit policies.

Data from the Labor Department showed nonfarm payrolls rose 157,000 in January, below the expected 166,000 rise, while the unemployment rate rose to 7.9% from 7.8% the previous month. It also revised initial readings for November and December non-farm payrolls sharply higher.

Overall, the numbers showed an economy that was expanding, but not at a rate fast enough to threaten a rollback of the Fed's quantitative easing policies, which have weakened the dollar while driving so-called ''riskier'' currencies. The common currency rallied to as high as $1.3711, its highest level against the dollar since November 2011, while trading higher against most other currencies as well.

Euro bulls were also encouraged by a report earlier in the day showing that a long-running decline in the region's manufacturing activity eased to its healthiest level in almost a year in January while unemployment and inflation stabilized, signs that the worst of the region's crisis may have passed.

Some market watchers, however, warned the euro's 8% move rise against the dollar since November may soon be due for a reversal as traders look to lock in their gains.

The dollar, meanwhile, continued to march higher against the yen, hitting its highest levels against the currency since May 2010 as traders bet that newly minted Prime Minister Shinzo Abe will be successful in implementing aggressive monetary easing in a bid to stimulate Japan's economy.

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