NEW YORK - (AP) - The Dow Jones industrial average closed above11,000 for the first time in five months Friday as hopes built thatthe Federal Reserve will take more action to get the economy goingagain.
The milestone, which effectively erases the effects of a longsummer slump for stocks, comes one day before the three-yearanniversary of the market's all-time high. The Dow is still 22.3percent below that level.
The last time the Dow closed above 11,000 was May 3, just threedays prior to a harrowing "flash crash" that briefly sent stocksplummeting. The Dow had reached its highest level of the year justa week before.
A weaker jobs report added to a series of tepid economicindicators in recent weeks that have built expectations that theFed will announce new steps to encourage borrowing when it meets inearly November.
Private employers added 64,000 workers last month, short of the75,000 economists expected, according to a monthly governmentreport released early Friday. Overall, 95,000 jobs were slashed asgovernments laid off workers, including temporary census employees.The unemployment rate held steady at 9.6 percent.
Jason Pride, director of investment strategy at wealthmanagement firm Glenmede, said that the weak report gives the Fed"the window of opportunity to take action."
The Fed's goal, if it starts buying bonds again, would be todrive interest rates down further from their already low levels andspark borrowing and spending. Lower rates could also eventuallydrive investors into riskier assets like stocks or into currenciesin countries with more attractive interest rates.
Alcoa Inc. was the biggest gainer among the 30 stocks that makeup the Dow Jones industrial average after reporting earnings thatbeat expectations late Thursday. Shares of the aluminum maker rose5.7 percent to close at $12.89 after the company raised itsforecast for global aluminum consumption.
Alcoa is traditionally the first of the Dow 30 to reportearnings and is often seen as a bellwether for industrialcompanies. Other materials companies such as Freeport-McMoRanCopper & Gold Inc. and Dow Chemical Co. also rose.
The Dow rose 57.90, or 0.5 percent, at 11,006.48. The Dow firstcrossed 11,000 in May of 1999, and reached its highest close of alltime on Oct. 9, 2007, when it finished at 14,164.53.
The Dow is up five of the past six weeks, and 5.5 percent forthe year.