US stocks: Markets gain slightly after monthly jobs data

NEW YORK - US stocks rose slightly on Friday after data showing smaller-than-expected job losses in September, with gains in Gilead Sciences Inc. related to avian flu fears helping the Nasdaq.

Blue-chip gainers included oil company Exxon Mobil Corp., which cut into some of its big losses for the week, and heavy equipment maker Caterpillar Inc.

The Nasdaq's biggest boost came from shares of biotechnology companies developing treatments to fight a possible outbreak of avian flu, including Gilead, whose stock rose more than 4 per cent as leaders discussed plans to battle the illness.

The Dow Jones industrial average gained 5.21 points, or 0.05 per cent, to end at 10,292.31. The Standard & Poor's 500 Index advanced 4.41 points, or 0.37 per cent, to finish at 1,195.90. The technology-laced Nasdaq Composite Index rose 6.27 points, or 0.30 per cent, to close at 2,090.35.

For the week, the Dow ended down 2.6 per cent, the S&P 500 fell 2.7 per cent and the Nasdaq dropped 2.9 per cent.

The Labor Department reported the US economy lost 35,000 jobs in September, far less than the decline of 143,000 jobs anticipated by economists polled by Reuters.

"It was a better-than-expected number, which is positive," said Marc Pado, US market strategist at Cantor Fitzgerald & Co.

"People are just a bit more confident of what the Fed has been saying, that the economy was on pretty sure footing outside of Katrina."

A string of cautionary remarks about inflation from Federal Reserve officials this week stoked expectations that the central bank would continue raising interest rates. Anxiety over rate hikes contributed to one of the year's worst weeks on Wall Street.

Higher interest rates are generally negative for stocks because they increase borrowing costs for companies and consumers.

The US bond market will be closed on Monday for the Columbus Day holiday, while the stock market will remain open.

In response to the avian flu fears, shares of BioCryst Pharmaceuticals Inc., a small biotech company in Birmingham, Alabama, jumped 13.6 per cent, or US$1.39, to US$11.65 on Nasdaq. Gilead Sciences Inc. shares rose 4.4 per cent, or US$1.99, to US$47.51.

"(Avian flu) is the next big news item, and all the dollars are chasing just a few stories at this point," said Robert Drust, managing director of listed trading at regional investment bank Wedbush Morgan in Los Angeles.

Among advancing Dow components, Caterpillar shares rose 2.6 per cent, or US$1.43, to US$56.62 on the New York Stock Exchange.

Exxon, another Dow stock, rose 1.8 per cent, or US$1.03, to US$59.60, also on the NYSE. Exxon, however, is down 6.2 per cent for the week, its biggest weekly decline since about mid-May.

Shares of Blockbuster Inc. surged 21.8 per cent, or 97 cents, to US$5.42 on the NYSE after comments from the video rental chain eased concerns it could default on the terms of its debt.

Among Nasdaq decliners were Apple Computer Inc., which slipped 0.8 per cent, or 40 cents, to US$51.30, after SG Cowen cut its rating on the stock to "neutral" from "positive," warning of potentially slower consumer spending.

Investors appeared to shake off concerns about a threat to the New York City subway system, which Mayor Michael Bloomberg and law enforcement authorities announced late Thursday afternoon. New York City's Pennsylvania Station was briefly evacuated for an investigation by police, but the train station reopened before noon.

US light crude oil futures for November delivery rose 48 cents to settle at US$61.84 per barrel.

Trading was heavy on the NYSE, with about 1.61 billion shares changing hands, above last year's daily average of 1.46 billion. On Nasdaq, volume was moderate, with about 1.47 billion shares traded, below last year's daily average of 1.81 billion.

Advancing stocks outnumbered declining ones by a ratio of about 5 to 3 on the NYSE and about 3 to 2 on Nasdaq.

- REUTERS