Job Figures Give Stocks Fourth Straight Up Day

A weak employment report on Friday stoked expectations for an end to the Federal Reserve’s credit-tightening campaign and drove the stock market up sharply, leaving many key indexes at either 4 1/2-year highs or all-time highs.

The technology sector led the way, as it had for most of the week, as investors snapped up semiconductor, Internet and software issues.

The Dow Jones industrial average gained 77.16 points, or 0.7%, to a new four-and-a-half year high of 10,959.31.

The Standard & Poor’s 500 was up 11.97 points, or 0.9%, to 1,285.45, and the Nasdaq composite climbed 28.75 points, or 1.3%, to 2,305.62. Like the Dow, they also ended at their best levels since mid-2001.

Indexes including the New York Stock Exchange composite, the Russell 2,000 and the S&P; 400 index of mid-size stocks finished at record highs.

Advancing issues outpaced decliners by more than 3 to 1 in active trading on the NYSE.

The government’s report that the economy added a net 108,000 jobs in December was below expectations. Although the news was downbeat on the face of it, weak economic data made it more likely that the Fed soon would stop raising interest rates, analysts said.

The central bank had signaled as much Tuesday, when it released the minutes of its Dec. 13 meeting. The minutes said policymakers believed that the number of additional rate hikes “probably would not be large.”

The Fed “is sending the message that they’re almost done, and this number is not going to change their mind,” Nasri Toutoungi, a money manager at Hartford Investment Management in Hartford, Conn., said of the employment figure.

After sliding in the final week of 2005, the stock market surged this week as investors poured back in. The Dow gained 2.3% for the week, the S&P; 500 jumped 3% and the tech-heavy Nasdaq soared 4.6%.

The strength in tech issues is a sign that investors believe the economy will continue to grow, and that business spending on capital equipment may pick up the slack from spent-out consumers, some analysts say.

Among Friday’s highlights:

* Citing stronger growth expectations for search advertising, Goldman Sachs raised Yahoo’s earnings targets, sending its shares up $1.68 to $43.21. Goldman also pegged a $500 price target for Google, which soared $14.42 to a record $465.66.

* IBM jumped $2.45 to $84.95. The company said Thursday it would freeze its $48-billion defined-benefit pension plan in 2008 and instead boost its contributions to employee 401(k) retirement plans, saying hefty pension costs weighed on its ability to compete with younger rivals.

* Other hot tech issues included Cisco Systems, up 42 cents to $18.77; SanDisk, up $4.92 to $73.95; and Broadcom, up $2.30 to $52.41.

* Homebuilders MDC Holdings and Brookfield Homes reported a sharp drop-off in orders during the fourth quarter, pulling down most of the sector. MDC sank $1.59 to $64.50 and Brookfield lost $1.48 to $49.82.

* Treasury bonds were little changed, with the yield on the 10-year T-note rising to 4.37% from 4.36% on Thursday. It was 4.39% a week earlier.

* In commodity trading, near-term gold futures rallied $13.40 to a 24-year high of $539.70 an ounce as the dollar fell. Gold rose $22.60 for the week.

* Fresh political uncertainty in the Middle East sent jitters through the energy market. A barrel of light crude climbed $1.42 to $64.21 in New York futures trading.