Stock prices end on a high note

NEW YORK – Wall Street put an upbeat spin Friday on the government’s report that the nation lost more than half a million jobs last month. Stocks reversed early losses and closed sharply higher as the data raised hopes that Washington will again step in to help the economy.

The Dow Jones industrial average closed up nearly 260 points as investors’ shock dissipated over the Labor Department’s report that employers slashed 533,000 jobs in November, far exceeding the 320,00 that economists had predicted.

Ultimately, even a terrible reading on employment wasn’t surprising to a market that has been drubbed by a stream of bad economic news.

The market’s advance in light trading volume Friday left Wall Street with moderate losses for the week, the result of a nearly 680-point slide in the Dow on Monday.

More important, the market was able to claim a victory of sorts over the course of the week – except for Monday’s drop, stocks repeatedly overcome bleak economic data and corporate announcements.

For the week, the Dow ended down 193.62, or 2.19 percent, at 8,635.42. The Standard & Poor’s 500 index finished down 20.17, or 2.25 percent, at 876.07. The Nasdaq composite index ended the week down 26.26, or 1.71 percent, at 1,509.31.

The Russell 2000 index finished the week down 12.05, or 2.55 percent, at 461.09.

The Dow Jones Wilshire 5000 Composite Index – a free-float weighted index that measures 5,000 U.S.-based companies – ended at 8,737.14, down 208.06 points, or 2.33 percent, for the week. A year ago, the index was at 14,963.52.

Demand for the safety of government debt eased slightly Friday but remained high. In the past week, Treasury yields have plunged to their lowest levels since the government started issuing them.

Stock market investors who originally sold Friday after the employment figures had a change of heart by afternoon, believing the numbers could make the government more likely to supply more aid for the economy.

They also appeared relieved by the market’s relatively cool reaction to the data – trading was orderly and the huge loss of jobs didn’t spark the type of massive sell-off it might have even a month ago when Wall Street still trying to determine how severe the recession would be.

“In a kind of paradoxical sense, the really ugly employment numbers probably helped the case for more help from Washington, whether it’s through the broader stimulus plan or more targeted industry measures,” said Craig Peckham, equity trading strategist at Jefferies & Co.

Friday’s advance was the eighth for the Dow in 10 sessions, raising some hopes that stability was returning to the Street after months of turbulence.