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NEW YORK - US stocks powered higher Friday as a blockbuster Microsoft bid for Yahoo helped Wall Street shake off a shock report showing the first decline in jobs for the US economy in over four years.
The Dow Jones Industrial Average jumped 92.83 points (0.73 percent) to close at 12,743.19, capping a strong week for the market.
The tech-heavy Nasdaq composite added 23.50 points (0.98 percent) to 2,413.36 while the Standard & Poor's 500 index rose 16.87 points (1.22 percent) to finish at 1,395.42.
Investors were hit with a deluge of news including data showing a loss of 17,000 jobs in January, the first decline in jobs since August 2003 for the US economy, and a blockbuster 44.6-billion-dollar bid by Microsoft for Yahoo that would shake up the tech space.
Although the economic reports highlighted concerns about recession, the news of a potentially big merger helped set a positive tone.
"The deal is really great news for the market and in particular the technology sector," said Kimberly DuBord at Briefing.com.
DuBord said Microsoft's bid highlighted the fact that stocks have been beaten down and may represent good value. Yahoo had sunk to a four-year low earlier this week.
"Microsoft, with a cash balance to rival some banks ... essentially is making a significant value deal for Yahoo," DuBord added.
The takeover bid highlighted the notion that companies are hunting for bargains again and possibly looking past the economic turmoil.
"Investors love mergers and acquisitions," said Al Goldman, market strategist at AG Edwards.
European stock markets joined the rally, extending gains as the takeover bid was announced. The London FTSE 100 index climbed 2.54 percent to 6,029.20 while in Paris the CAC 40 rose 2.22 percent to 4,978.06. The Frankfurt Dax advanced 1.71 percent to reach 6,968.67.
Among key stocks in New York, Microsoft fell 6.6 percent to 30.45 dollars after unveiling the unsolicited cash-and-stock bid for Yahoo, which would alter the tech sector if consummated.
Yahoo shares surged 48 percent to 28.38 dollars on the bid, which was a 62 percent premium to its closing price Thursday.
Google, which could be impacted by a Microsoft-Yahoo combination, slid 8.6 percent to 515.90 dollars a day after reporting earnings that came up short of Wall Street estimates.
Elsewhere, ExxonMobil shares fell 0.52 percent to 85.95 even though the biggest US oil group reported a quarterly profit ahead of expectations that created a record annual profit of 40.6 billion dollars, the largest ever for a US firm.
Oil rival Chevron fell 0.91 percent to 82.49 despite reporting profits beating most Wall Street forecasts.
Bonds gained after the weak economic news. The yield on the 10-year US Treasury bond eased to 3.600 percent from 3.639 percent Thursday and that on the 30-year bond fell to 4.318 percent against 4.354 percent. Bond yields and prices move in opposite directions.
- AFP /ls
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