FINANCIAL MARKETS : STOCKS : Jobs Report Boosts Market; Dow Up 10.66

NEW YORK —  The stock market closed higher Friday as weak employment data fired up hopes for lower interest rates.

The Dow Jones index of 30 industrials rose 10.66 to 2,731.44, winding up the week with a net loss of 16.21 points.

Advancing issues outnumbered declines by about 5 to 4 in nationwide trading of New York Stock Exchange-listed stocks, with 813 up, 646 down and 525 unchanged.

The Labor Department reported Friday morning that the civilian unemployment rate increased 0.1 percentage point to 5.4% in November.

The figures showed a gain of 210,000 in non-farm payroll employment, after an October increase in jobs that was revised sharply downward to 93,000.

Analysts said that painted a picture of continued softness in some major sectors of the economy, apparently improving the chances for further moves by the Federal Reserve to relax its credit policy in the weeks ahead.

Gainers among the blue chips included Coca-Cola, up 1 1/8 at 78; Du Pont, up 1/8 at 120 7/8; Exxon, up 3/8 at 49; Sears Roebuck, up 3/8 at 38, and Chrysler, up 1/2 at 19 3/8.

Pfizer, which projected slightly lower earnings for the fourth quarter, tumbled 4 3/8 to 69 1/8.

Tonka Corp. lost 2 1/2 to 11 1/4. The company lowered its revenue estimate for the year, citing slower-than-expected sales during the holiday season.

That prompted selling as well in the shares of Toys R Us, which was down 1 3/4 at 35 3/4.

Elsewhere, several stocks that had run up dramatic gains earlier in the year came under pressure.

Federal National Mortgage led the active list, down 2 at 34 5/8, and Federal Home Loan Mortgage fell 3 1/2 to 72 5/8. Brokers said the stocks have suffered lately from concern about the outlook for real estate credit.

L.A. Gear slumped 3 3/8 to 30 3/8. A Wall Street Journal article said the footwear manufacturer faced the “perils of shifting fads.”

Big Board volume totaled 144.91 million shares, down from 161.98 million in the previous session.

In Tokyo, a technical correction and some early index-linked selling dragged share prices lower Friday, giving pause to an almost uninterrupted four-week rally. The Nikkei 225-share index dropped 134.05 points to 37,724.06, reversing its 203.82-point gain on Thursday.

In London, stocks closed higher on buying for a long three-week account, which starts Monday. The Financial Times 100-share index ended up 16.8 points at 2,363.5.

CREDIT Bond Prices Rally in Response to Data In the credit markets, the unemployment report sparked a rally in government bond prices, sending interest rates lower.

The Treasury’s closely watched 30-year bond jumped 7/16 point, or $4.37 for every $1,000 in face value. Its yield, which falls when its price rises, tumbled to 7.88% from 7.92% late Thursday.

The federal funds rate, the interest on overnight loans between banks, was quoted at 8.438%, unchanged from late Thursday.

The downward revision in payroll growth in October cheered bond traders.

Traders have been hoping for evidence of sluggish economic activity.

“The data were viewed as constructive for the bond market,” said William Sullivan, director of money market research at Dean Witter Reynolds Inc.

Each new indication of economic weakness improves the chances that the Federal Reserve will try to stimulate growth by pushing interest rates lower, analysts say. Lower rates tend to boost bond prices.

CURRENCY Dollar Edges Down; Gold Makes Gains The dollar ended marginally weaker against most key currencies after the government released the unemployment report.

Gold rose in domestic trading following a big advance overseas.

On the Commodity Exchange in New York, gold bullion for current delivery closed at $411.80 an ounce, up $1.80 from late Thursday. Republic National Bank in New York quoted a late bid for gold at $411.50 an ounce, up $1.90.

Currency dealers said the November unemployment data did little to move the dollar because it was within market expectations.

In Tokyo, where trading ends before Europe’s business day begins, the dollar ended at 144.27 Japanese yen, up 0.14 yen from Thursday’s close. It traded at 144.20 yen in London, and 144.300 yen in New York, down from 144.305.

The dollar declined against the British pound. Sterling traded at $1.5793 in London, up from $1.5750 Thursday, and at $1.5825 in New York, up from $1.5780.

COMMODITIES Pork Futures Plunge as Export Sales Lag Pork belly futures prices plunged on the Chicago Board of Trade as concern over lagging export sales prompted traders to bail out of the weak market. Livestock futures also were lower.

On other commodity markets, cotton continued to lose ground, grain and soybeans were mixed, precious metals gained and energy futures were mostly higher.

Live cattle settled 0.07 to 0.47 cent lower, with the contract for delivery in December at 75.55 cents a pound; feeder cattle were 0.03 to 0.18 cent lower, with January at 82.77 cents a pound; hogs were 0.30 cent to 1.18 cents lower, with December at 50.82 cents a pound, and frozen pork bellies were 1.85 to 2 cents lower, with February at 52.45 cents a pound.

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