* Dow hits fresh highs, S&P 2 pct away from record intraday
* U.S. non-farm payrolls jump in February, unemployment at
lowest since Dec '08
* Dow up 0.2 pct, S&P up 0.1 pct, Nasdaq up 0.1 pct
By Angela Moon
NEW YORK, March 8 U.S. stocks edged higher on
Friday on a much stronger-than-expected payrolls report, but
gains were capped as investors sold some bank shares to book
profits in the wake of the Federal Reserve's "stress tests"
The Dow Jones industrial average hit yet another record high
and the S&P 500 has advanced to a level about 2 percent away
from an all-time intraday high, as investors have seized the
opportunity to buy on dips.
Hiring in the United States jumped in February with non-farm
payrolls adding 236,000 last month, easily beating expectations
for a gain of 160,000 jobs. The unemployment rate fell to 7.7
percent, the lowest since December 2008.
"We have already coined this year's expected trend as being
'the year of payroll growth' and so far, we feel that the data
is living up to such expectations," said Andrew Wilkinson, chief
economic strategist at Miller Tabak & Co in New York.
But gains were limited by a retreat in financial stocks,
which had risen in advance of the release of the Federal
Reserve's stress test results. After the Fed said on Thursday,
as expected, that the biggest U.S. banks have enough capital to
withstand a severe economic downturn, investors sold some bank
shares to lock in some of the recent gains, analysts said.
The S&P financial sector index, which had climbed
more than 3 percent for the month, was flat at midday. The index
was down just 0.02 percent at midday after falling about 0.3
percent earlier in Friday's session.
JPMorgan Chase, down 1.3 percent at $49.95, was the
biggest drag on both the Dow and the S&P 500.
"The banks have been leading for a while. The banks, as a
group, are up sharply. Yesterday they were up big in
anticipation of those stress tests last night," said Ken
Polcari, director of the NYSE floor division at O'Neil
Securities in New York.
"The move already came, that is what people were expecting,
so now these investors are deciding to take some profits."
Still, investors were mindful of the possibility of a bigger
pullback after the steady gains this year. The last correction
for the benchmark S&P 500 index was nearly a year ago - a 9.9
percent slide from April highs to the start of June.
The Dow Jones industrial average was up 24.11 points,
or 0.17 percent, at 14,352.60. The Standard & Poor's 500 Index
was up 1.81 points, or 0.12 percent, at 1,546.07. The
Nasdaq Composite Index was up 3.04 points, or 0.09
percent, at 3,235.13.
Adding to the stream of positive economic data, wholesale
inventories increased 1.2 percent to $504.4 billion in January -
the fastest pace of growth since December 2011. The strong
January reading followed a revised 0.1 percent rise in December
McDonald's Corp gained 1.5 percent to $98.57 and
gave the biggest boost to the Dow after the fast-food hamburger
chain said February sales at established restaurants fell just
1.5 percent, a little better than expected.
Pandora Media shares jumped 18.2 percent to $13.86 on
stronger-than-expected quarterly results. The company, the
leader in Internet-streaming radio, also made the surprising
announcement that CEO Joseph Kennedy is stepping
Skullcandy Inc shares plunged nearly 22 percent to
$5.27 after the headphone maker said it expects to post a loss
in the current quarter, even though fourth-quarter revenue was
higher than expected.
The benchmark S&P 500 index has advanced 1.8 percent for the
week, its biggest weekly gain since the first week of the year,
on data showing an improving labor market picture and
expectations that the Federal Reserve will not end its economic
stimulus program any time soon.