Dow erases its loss for 2010 ahead of jobs report

NEW YORK -- Optimism about the government's February jobs report sent the Dow Jones industrials back into the black for 2010.

Stocks ended Thursday with a moderate advance after managing only modest moves for much of the day. Investors seemed to set aside concerns about the day's mixed economic reports and focus instead on the Labor Department's jobs report, due Friday morning.

The monthly snapshot of employment is widely considered to be the most important reading on the economy because a lasting recovery won't be possible without more jobs.

An unexpected drop in pending home sales held the market to a tight range for most of Thursday's trading. The National Association of Realtors said that its index of home sales agreements fell 7.6 percent in January from December. Sales contracts fell to the lowest level since April.

The housing numbers chilled some of the enthusiasm about stronger February sales at many retailers. Abercrombie & Fitch Co., Nordstrom Inc. and Target Corp. all posted monthly sales that topped analysts' expectations. Wal-Mart Stores Inc. raised its dividend 11 percent.

The Labor Department also said that initial jobless claims dipped last week after two straight weeks of unexpected increases. New claims fell to 469,000, better than the 470,000 economists had forecast.

The weekly numbers provided some encouragement ahead of February's employment numbers. Friday's report is expected to show that unemployment rose to 9.8 percent from 9.7 percent in January as employers cut 50,000 jobs. But economists also expect slight gains in both average hourly earnings and average hours worked. Gains in these areas often precede a pickup in hiring.

The job market is often one of the last parts of the economy to recovery after a recession. Daniel Penrod, senior industry analyst for the California Credit Union League in Ontario, Calif., said employment gains are needed to stabilize the economy and add to a sense that a recovery is occurring.

"It used to be that confidence led in to actual employment where I think the reverse is true now," he said. "The job market has been so severe nationally that people are really feeling the lumps."

According to preliminary calculations, the Dow rose 47.38, or 0.5 percent, to 10,444.14. The Dow is now up 16 points, or 0.2 percent, for 2010.

The Standard & Poor's 500 index rose 4.18, or 0.4 percent, to 1,122.97. It is up 0.7 percent for the year.

The Nasdaq composite index rose 11.63, or 0.5 percent, to 2,292.31 and is up 1 percent in 2010.