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NEW YORK — Stocks advanced modestly Friday as investors appeared mostly unfazed by a report showing the economy gave up 80,000 jobs last month. While some nervous investors fled to government bonds, the report appeared to simply confirm many investors' assumptions of a widespread economic slowdown.
Although the job losses are a significant sign of economic weakness, a weak report was widely expected, and some investors were relieved the total was not higher. Thomson/IFR had projected 15,000 jobs were lost in March, but some economists expected 150,000 job cuts.
Payrolls for January and February were revised lower by a total of 67,000 and the unemployment rate shot up to 5.1 percent, the highest since September 2005. The economy has given up jobs the first three months of this year, and the latest report adds fuel to the belief of many economists that the U.S. is already in recession.
"The economic data is negative, but I think what the market's telling us is we've priced in a lot of the bad news already," said Arthur Hogan, chief market strategist at Jefferies & Co. "You could make the argument that we've thrown a lot of difficult news at this market and it's reacted very well."
In midafternoon trading, the Dow Jones industrial average rose 15.79, or 0.13 percent, to 12,641.82, after falling in morning trading.
Broader stock indicators also gained. The Standard & Poor's 500 index added 5.57, or 0.41 percent, to 1,374.88, and the Nasdaq composite index advanced 16.83, or 0.71 percent, to 2,380.13.
Advancing issues outnumbered decliners by about 3 to 2 on the New York Stock Exchange, where volume came to a light 771.7 million shares. Light volume can skew the market's moves.
Treasury prices jumped after the jobs report, as investors often seek the safety of government-backed bonds amid uncertainty about the economy. The yield on the benchmark 10-year note, which moves opposite its price, fell to 3.47 percent from 3.59 percent late Thursday.
The dollar was mixed against other major currencies, while gold prices rose.
Light, sweet crude rose $1.65 to $105.48 per barrel on the New York Mercantile Exchange. Retail gas prices, meanwhile, surged to a new record above $3.30 a gallon, and appear ready to rise further as supplies tighten ahead of the summer driving season.
Friday's moderate moves followed a modest rise Thursday in response to Federal Reserve Chairman Ben Bernanke's remarks that the Fed expects to recover most, if not all, the $29 billion worth of loans it made to keep struggling Bear Stearns Cos. from collapse. Bernanke's comments to the Senate Banking Committee, in which he defended the central bank's decision to aid JPMorgan Chase & Co.'s takeover of Bear Stearns, were calming to investors hoping that demand is returning to the tight credit markets.
Other central bankers and business leaders appearing before the committee indicated they were able to avert a financial catastrophe with Bear Stearns sinking quickly toward bankruptcy.
Remarks by Bernanke earlier in the week left the door open to another interest rate cut from the Federal Reserve.
"This (jobs) number still supports the notion that there's likely going to be more monetary policy easing by the Fed," said Michael Strauss, chief economist at Commonfund, noting that investors appear to be realizing that the central bank's moves take time to filter into the economy.
Figures like employment numbers also lag, noted Hogan. "The unemployment rate will go higher before the recession is over," he said. "I think the market is trying to tell us we understand that, we've seen this before"
"I think there are market participants who are looking through the valley and saying they're seeing the other side," he added.
In corporate news, shares of General Motors fell after a private equity group said it terminated its agreement to invest $2.55 billion in its largest auto parts supplier, Delphi Corp., which has been trying to emerge from bankruptcy protection. GM fell 82 cents, or 3.8 percent, to $20.77.
The Russell 2000 index of smaller companies rose 2.02, or 0.28 percent, to 715.59.
Overseas, Japan's Nikkei stock average fell 0.72 percent. Britain's FTSE 100 finished up 0.95 percent, Germany's DAX index rose 0.32 percent, and France's CAC-40 added 0.27 percent.
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Associated Press Business Writer Eileen AJ Connelly in New York contributed to this report.
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