Wall Street rallies on upbeat economic data

08:30, March 08, 2010      

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Wall Street rallied on Friday after the U.S. Federal Reserve reported borrowing by consumers unexpected rose for the first time in a year.

U.S. consumer credit increased at an annual rate of 2.5 percent in January after 11 consecutive months decline, signaling that Americans are regaining some confidence of the economy, reported the Federal Reserve on Friday.

Consumer spending, which accounts for about 70 percent of the overall economic activity, remains the major drive of the U.S. economy.

The Fed said that total borrowing in January rose by 4.96 billion dollars to 2,477.6 billion dollars from 2,481.4 billion dollars in December. It was much better than economists' expectation of 4.5 billion dollars decline, and was the largest increase since July 2008.

Meanwhile, the U.S. Labor Department said U.S. employers cut a fewer-than-expected 36,000 jobs in February, leaving the unemployment rate steady at 9.7 percent, while economists had expected it to rise to 9.8 percent.

The number of temporary help jobs, which is regarded as a sign for future hiring, rose by 48,000, while the average hourly earnings of employees rose 3 cents to 22.46 dollars.

The report was closely watched by the market as stabilization in the job market is crucial to a sustained economic recovery and investors believed the report may set the tone for the market in the coming one or two weeks.

The Dow Jones industrial average rose 115.26, or 1.10 percent, to 10,559.40. The Standard & Poor's 500 index gained 15.71, or 1. 40 percent, to 1,138.69 and the Nasdaq was up 34.04, or 1.48 percent, to 2,326.35.

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