Stocks up; jobs report offers a bit of hope

NEW YORK - Stocks jumped in light trading yesterday after the government reported that the pace of job losses slowed in August to the lowest level in a year.

The Dow Jones industrial average gained 97 points to halve its loss for the week after the Labor Department said employers cut fewer workers last month. However, the report also showed that the ranks of the unemployed swelled to 9.7 percent, the highest level since June 1983.

Analysts had been expecting the rate to increase to 9.5 percent after unexpectedly dipping in July. Many economists expect the rate to top 10 percent by early next year.

Unemployment is widely seen as the economy's biggest hurdle to recovery, and concerns about it have been weighing on the stock market. As long as job losses remain high, consumers could hold off spending money, which the U.S. economy badly needs to resume growth.

Analysts said that the thin trading volume before the long holiday weekend made it difficult to conclude that a shift in investor sentiment was occurring. Markets will be closed Monday for Labor Day.

The Dow rose 96.66, or 1 percent, to 9,441.27. The Standard & Poor's 500 index rose 13.16, or 1.3 percent, to 1,016.40, while the Nasdaq composite index added 35.58, or 1.8 percent, to 2,018.78.

In downturns in the last 60 years, the S&P 500 index has reached a bottom an average of four months before a recession ended and about nine months before unemployment reached its peak. The index, which is the basis of many mutual funds, hit a 12-year low in March.

Some traders are also concerned about the market's track record for September, which has been the worst month for stocks over the last 80 years. Since 1929, the S&P 500 index has lost an average 1.3 percent during the month. But the index has gained about 2 percent in the 14 Septembers that followed the end of bear markets.