NEW YORK – Stocks fluctuated in quiet trading Friday as investors largely looked past a report that the U.S. unemployment rate jumped in March to its highest level since 1983.
The modest ups and downs follow four straight days of gains and suggest the market is taking another time-out from a 20 percent rally over four weeks that has swept stocks off their lowest levels in nearly 12 years.
The Labor Department’s report that unemployment jumped to 8.5 percent last month wasn’t as bad as the worst expectations in the market. The numbers were still grim but didn’t derail an emerging sense of optimism over the past four months that the economy may be beginning to right itself.
Major market indicators moved less than 1 percent in midday trading. The Dow Jones industrials fell 19.03 to 7,959.05 and the Standard & Poor’s 500 index fell 0.70 to 833.68. The Nasdaq rose 3.74 to 1,606.37, helped by a surge in shares of BlackBerry maker Research in Motion Ltd., which turned in better-than-expected profits.
The Dow had surged 2.8 percent on Thursday and spent much of that day above the 8,000 mark for the first time since February.
Tom Phillips, president of TS Phillips Investments in Oklahoma City, said the improved tone in the market since March is helping traders show more moderate reactions to bad news than they might have a month ago.
“If the expectation was for truly horrendous numbers and they’re only ugly that’s a good thing,” he said.
Employers slashed a net total of 663,000 jobs last month, only slightly worse than the 654,000 economists expected. The employment rate jumped to its highest level since late 1983, when the economy was starting to emerge from a deep recession.
The economy has shed a net total of 5.1 million jobs since the recession began in December 2007. Nearly two-thirds of the losses have come in the last five months.
The monthly employment report is often regarded as the most important piece of economic news affecting the market. There is even greater focus on jobs data now that the U.S. recession has stretched into the longest downturn since World War II.
Even as the numbers weren’t as bad as some analysts had feared investors will need to see further signs that the recession isn’t getting worse to keep the rally going. Analysts said the labor market is unlikely to provide much encouragement anytime soon.
“I would say that there is no sign of a bottom in these numbers,” said Charles K. Ortel, managing director of Newport Value Partners L.L.C., a New York investment research firm.
Technology stocks found support after Research in Motion posted a 26 percent increase in its fourth-quarter earnings. The stock jumped $9.83, or 20 percent, to $58.92.
Traders have been emboldened in recent weeks by better-than-expected readings on key economic factors like housing, banking and manufacturing. The Dow ended Thursday up 20.4 percent since March 9 — its best four-week run since 1933.
The market could still recover even if unemployment remains high. Wall Street will just want signs that prospects for the labor market aren’t getting far worse. In downturns during the past 60 years, the S&P 500 index has hit bottom an average of four months before a recession ended and about nine months before unemployment hit its peak.
Stocks found no help Friday from a report showing that the services sector of the economy shrank for the sixth consecutive month in March and at a faster pace than expected.
The Institute for Supply Management’s index fell to 40.8 last month from 41.6 in February. Any number below 50 indicates contraction in the services industry.
About four stocks rose for every three that fell on the New York Stock Exchange, where volume came to 541.8 million shares.
The Russell 2000 index of smaller companies rose 0.99, or 0.2 percent, to 451.18.
Bond prices fell, pushing the yield on the benchmark 10-year Treasury note up to 2.89 percent from 2.76 percent late Thursday. The yield on the three-month T-bill rose to 0.21 percent from 0.20 percent.
European and Asian markets were mixed following a powerful global stock rally the day before after world leaders pledged $1 trillion for financial rescue measures and promised stronger regulation of financial institutions.
Japan’s Nikkei stock average closed 0.3 percent higher, while Britain’s FTSE 100 fell 2.3 percent in afternoon trading. Germany’s DAX rose 0.1 percent and France’s CAC-40 fell 1.1 percent.