Wall Street opens higher open after jobs data

NEW YORK — Stocks soared in early trading Friday as Wall Street cheered the positive news it had been hoping for: job losses slowed in April and big banks don’t need as much capital as feared.

The Labor Department said employers cut 539,000 jobs last month, the fewest in six months and much less than the 620,000 job losses analysts expected.

However, the unemployment rate climbed to 8.9 percent from 8.5 percent as many businesses refrained from hiring amid an uncertain economic outlook. Still, the market’s overall reaction to the report was positive.

“This jobs data basically validates that the economy is indeed stabilizing,” said Kent Engelke, chief economic strategist at Capitol Securities Management. “I do believe that we’re going to continue to have job losses in the immediate future, but I also contend there is a possibility that hiring is going to occur faster than most anticipate.”

The jobs report added to investors’ upbeat mood following the results of the government’s stress tests of banks. The report said 10 of the 19 largest U.S. banks will need to raise about $75 billion in new capital as a buffer against losses if the economy worsens. Some investors feared the test results would show the big banks needed much more capital.

In the first half hour of trading, the Dow Jones industrial average climbed 113.50, or 1.4 percent, to 8,523.35. The Standard & Poor’s 500 index rose 13.21, or 1.5 percent, to 920.60, and the Nasdaq composite index rose 16.30, or 1.0 percent, to 1,732.54.