Wall Street report: Friday close

MARKETS extended their end of recession party as strong jobs data convinced investors that economic recovery and a profit rebound looked more like sure bets.

The Dow Jones Industrial Average, which has rallied nearly 500 points in the past six sessions on signs pointing to an upturn in the US economy, closed with a gain of 47.12 points or 0.5% to 10,572.49. Late profit-taking trimmed the Dow's gain by two-thirds from session highs.

The Nasdaq Index, up 13% in the past three weeks, held on to most of its gains, rising 48.04 points or 0.5% to 1929.67. For the week, the Dow was up 2%, while the Nasdaq climbed 7%.

Washington sparked the latest rally by reporting that the US unemployment rate fell to 5.5% in February from 5.6% in January, its second monthly decline. The economy created 66,000 new jobs during the month, from a loss of 126,000 in January and the strongest performance in a year.

Bill Sullivan, senior economist at investment firm Morgan Stanley, said the data confirmed that the recession, officially pegged as beginning last March, had ended. 'There's no doubt that these data confirm a turn-around in the economy,' he said. Sullivan said there was also little doubt that Federal Reserve chairman Alan Greenspan knew about the latest data when he delivered a more upbeat assessment of the economy to Congress on Thursday.

Some of the ebullience was tempered by talk that a much stronger than expected rebound could force Greenspan and his colleagues to raise interest rates when they meet next on 19 March, or more likely at their May get-together. The Fed had pushed down its key overnight lending rate to 1.75%, its lowest in 40 years, to help lift the economy out of the manufacturing-led slump.

Senate's approval of a stimulus package sought by the Bush Administration after the 11 September attacks fuelled hopes that the recovery might yield 2002 growth of as much as the 4% forecast by some economists.

Industrials and financials, which have led the recent advance, were joined by a strong tech sector. American Express added 96 cents or 2.4% to $40.47, IBM surged $1.38 or 1.3% to $105.09, Boeing, ahead 92 cents or 1.9% to $49.40, and Intel, up $1.19 or 3.6% to $34.17.

General Electric, ahead strongly early in the session, closed down 33 cents or 0.8% to $40.62 after it released an annual report with more details about its accounting which had drawn questions in the post-Enron environment.

A sour note on the jobs front was struck by two bankrupt companies. Kmart, the discount retailing chain struggling to reorganise, said it would lop 22,000 jobs and shut 284 stores. Telecoms group Global Crossing said it would cut 1,600 jobs. Wal-Mart rose 82 cents or 1.3% to $62.52 on reports that many of the closed Kmart stores were near existing Wal-Mart outlets.

Semiconductor company Applied Materials jumped $2.17 or 4.2% to $53.33 after the Justice Department closed an investigation of the company.

Sun Microsystems climbed $1.17 or 13% to $10 as it filed a private lawsuit claiming it was entitled to at least $1bn from arch rival Microsoft because of alleged 'predatory behaviour' by the world's biggest software maker. Microsoft rose 82 cents or 1.3% to $62.52.