COMBINED NEWS REPORTS
February 8, 2009
More jobs were lost in January than in any month since December 1974. The unemployment rate is the highest since September 1992. President Barack Obama said the economic downturn "could not be more serious." Wall Street's reaction? Let's party.
Despite the grim economic news, the Dow and the S&P 500 index had their best week in more than a month. The Nasdaq composite index had its biggest weekly gain since November.
The Labor Department said the nation lost 598,000 jobs last month and the unemployment rate climbed to 7.6 percent. If part-time employees, discouraged workers and others are factored in, the unemployment rate would have been 13.9 percent in January, highest on record.
"People are thinking ahead to what are these numbers going to look like in June," said James Paulsen, chief investment strategist at Wells Capital Management in Minneapolis. "Main Street is in free fall, which is where Wall Street was in September and October. Wall Street since mid-October has been flat, and that's what Main Street might look like by spring or early summer."
The Dow Jones industrial average closed Friday at 8,280.59, a gain of 3.5 percent for the week. The Nasdaq composite index finished at 1,591.71, up 7.8 percent. The S&P 500 index ended at 868.60, a rise of 5.2 percent.
Much of the last week's big rally was attributed to hope that a bank-rescue plan, scheduled to be unveiled Monday by Treasury Secretary Timothy Geithner, will lift the economy from recession.
"All focus right now is now is really on Washington," said Dan Cook, senior market analyst at IG Markets