US stocks rose on Friday, ending the week with gains after data showed a healthy job market while Citigroup Inc shares surged on speculation the company may divest some businesses and shake up senior management.
The government reported that US employers add a bigger-than-expected 132,000 jobs in November. But the jobs figure was not deemed high enough to raise concerns that the Federal Reserve would be forced to raise interest rates to cool economic growth.
Citigroup's stock rose more than 2 percent on the rumours with roughly triple its daily average volume, leading advances in both the Dow Jones industrial average and the S&P 500. "The employment report appeared to be a pretty good one," said Peter Jankovskis, director of research at OakBrook Investments LLC in Lisle, Illinois. "Good growth, but non-inflationary growth in a nutshell, is what is driving the market higher today."
The Dow Jones industrial average gained 29.08 points, or 0.24 percent, to end at 12,307.49. The Standard & Poor's 500 Index added 2.55 points, or 0.18 percent, to finish at 1,409.84. The Nasdaq Composite Index advanced 9.67 points, or 0.40 percent, to close at 2,437.36. For the week, the Dow rose 0.93 percent, the S&P 500 advanced 0.94 percent and the Nasdaq was up 1 percent.
Before Friday's opening bell, the Labour Department reported a surprisingly strong gain of nonfarm jobs in November. The jobs figure exceeded economists' forecast for growth of 110,000 jobs and increased investors' optimism about the outlook for corporate profits. But the US unemployment rate edged up to 4.5 percent in November from the 5-1/2-year low of 4.4 percent reached in October.
Citigroup's stock rallied on rumours it may consider selling some units and amid renewed talk that Citigroup Chief Financial Officer Sallie Krawcheck may be preparing to resign. Representatives of Citigroup declined to comment on the divestiture talk. The company denied persistent speculation that Krawcheck would leave the firm, but declined to confirm she will stay in her CFO role.
Shares of Citigroup rose 2.3 percent, or $1.14, to close at $51.85 on the New York Stock Exchange. Earlier, the stock surged 3.8 percent to $52.65, its highest level in more than 2-1/2 years. This gain marked the stock's biggest one-day percentage jump in more than seven months.
"In the financial sector, there seem to be a lot of rumours out there impacting some of the largest names," said Cheryl Duke, chief investment officer with Eastover Capital Management in Charlotte, North Carolina.
Shares of Bank of America Corp dropped 1.6 percent, or 83 cents, to $51.66 in Big Board trading amid mounting speculation the US bank could bid for UK bank Barclays Plc. Bank of America's stock was the heaviest weight on the S&P 500, limiting its advance. The US-listed shares of Barclays shot up 4.4 percent, or $2.46, to $58.25 on the NYSE.
McDonald's Corp stock was up 1.1 percent, or 48 cents, at $43.76 and ranked among the Dow's major advancers after the fast-food company reported a gain of 6.2 percent in November same-store sales at its hamburger restaurants. Earlier, McDonald's stock climbed to $43.89, a seven-year high.
In contrast, shares of Yum Brands Inc fell 2.2 percent to $59.72 on Friday after an analyst downgraded the stock due to concerns about slowing sales momentum in the United States and difficult upcoming sales comparisons at KFC and Taco Bell. The analyst said there could be a significant negative sales impact on Taco Bell related to its closing of a number of stores after the recent outbreak of E. coli bacteria, mostly in the North-eastern United States.
Among stocks lifting the Nasdaq was Apple Computer Inc, up 1.4 percent, or $1.22, at $88.26. That represented a reversal from Apple's slide on Thursday. Volume was moderate on the NYSE, where about 1.36 billion shares changed hands, below last year's daily average of 1.61 billion. On the Nasdaq, about 1.85 billion shares were traded, above last year's daily average of 1.80 billion.
Decliners narrowly edged out advancers on the NYSE, where 1,668 stocks fell and 1,628 shares rose. On the Nasdaq, the trend was positive by a slim margin, with 1,543 stocks advancing and 1,504 shares declining.
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