* Wall St rallies on fewer-than-expected jobs lost in July
* Financials lead gains; JPMorgan gains and AIG soars
* DJ index of home builders' shares pops above 6 pct
* Dow up 1.5 pct, S&P 500 up 1.6 pct, Nasdaq up 1.6 pct
* For up-to-the-minute market news click []
(Updates to midday)
By Angela Moon
NEW YORK, Aug 7 (Reuters) - U.S. stocks rallied, driving
the Standard & Poor's 500 Index to a 10-month high on Friday
after a stronger-than-expected jobs report added to recent
data pointing to an economic recovery.
The July employment data boosted stocks across the board,
with financial shares leading the charge. The S&P financial
sector index <.GSPF> rose 3.7 percent. JPMorgan Chase & Co
<JPM.N> shot up 5 percent to $42.78 and led the Dow higher.
"One of the weakest links in the economy has been
employment. The data today was (strong) enough to trigger
enthusiasm," said Craig Peckham, equity trading strategist at
Jefferies & Co in New York.
"What this means is that consumer spending will be up and
others (sectors) will come along as well."
The nonfarm payrolls data showing fewer-than-expected job
cuts in July comes on the heels of strong readings on housing
and manufacturing earlier this week.
The first profit in seven quarters for American
International Group Inc <AIG.N> also lifted financial stocks
as the insurer's shares jumped 19.2 percent to $26.86.
AIG's profit news reassured investors that the company,
rescued by U.S. taxpayers during the financial crisis, was
showing signs of life. At Thursday's close, the stock was up
nearly 70 percent since the beginning of the week.
The Dow Jones industrial average <> was up 134.90
points, or 1.46 percent, at 9,391.16. The Standard & Poor's
500 Index <.SPX> was up 16.20 points, or 1.62 percent, at
1,013.28. The Nasdaq Composite Index <> was up 31.34
points, or 1.59 percent, at 2,004.50.
Before the opening bell, the Labor Department said U.S.
employers cut 247,000 nonfarm jobs in July -- far less than
the 320,000 expected and the smallest decline in a year,
suggesting the recession was abating.
The July unemployment rate slipped to 9.4 percent from 9.5
percent in June, the first time the rate has fallen since
April 2008. (For details, see [])
The hard-hit housing sector got another boost after shares
of Beazer Home USA Inc <BZH.N> soared nearly 18 percent to
$3.90 a day after reporting a third-quarter loss that was much
narrower than expected.
Goldman Sachs also added U.S. home builder D.R. Horton Inc
<DHI.N> to its "conviction buy" list, saying the company is
best positioned to benefit from the approaching expiration of
the federal housing stimulus. D.R. Horton's stock gained
almost 8 percent to $13.53.
The Dow Jones U.S. Home Construction Index <.DJUSHB> shot
up 6.2 percent.
CIT Group Inc <CIT.N> rose 3.7 percent to $1.68 after the
troubled lender reported progress on its restructuring plans.
It suspended payment of preferred dividends and said it had
completed a drawdown of its $3 billion secured credit
facility. []
Among the Nasdaq's advancers, graphics chipmaker Nvidia
Corp <NVDA.O> added 4.9 percent to $ 13.76 a day after
reporting a smaller quarterly loss. Nvidia also gave a
third-quarter sales outlook above expectations.
[]
The broad S&P 500 is now up 49.7 percent from its 12-year
closing low in early March, driven by a string of economic
numbers suggesting a recovery, and an earnings season with
most S&P 500 companies beating expectations.
(Reporting by Angela Moon; Editing by Jan Paschal)
