* Bargain hunting follows 2-day sell-off
* Payrolls, housing data paint grim economic picture
* Energy shares rise with oil above $60 a barrel
* GM, Ford drop after bleak results, but Ford ends higher
* Dow up 2.9 pct, S&P up 2.9, Nasdaq up 2.4 percent
(Updates to close)
By Leah Schnurr
NEW YORK, Nov 7 (Reuters) - U.S. stocks rose on Friday as
bargain hunters scooped up shares at multiyear lows after a
big drop in the October payrolls was less dire than feared.
For the week, though, the indexes closed lower after an
extremely volatile run since Monday's opening bell. The first
week of November was capped not only by the biggest Election
Day rally ever, but followed by a huge reversal the next day.
The week included the biggest two-day dive since October
1987.
"Essentially, the markets moved higher today because much
of the bad news in today's employment report was already
incorporated into the minds of investors," said Michael
Sheldon, chief market strategist at RDM Financial in Westport,
Connecticut.
Goldman Sachs analysts had expected up to 300,000 jobs may
have been cut from non-farm payrolls in October. So when the
Labor Department reported 240,000 jobs lost last month, that
did not send the stock market into a tailspin even though the
figure exceeded the median forecast of 200,000.
Exxon Mobil <XOM.N> surged 6.3 percent and gave the
biggest lift to the Dow, benefiting from bargain hunting and
oil's ability to stay above the psychologically important $60-a-barrel level.
Stocks pared gains immediately after a news conference by
President-Elect Barack Obama on some disappointment that he
did not outline any new additional steps to shore up the
ailing economy in the near term. But stocks recovered by the
close.
The Dow Jones industrial average <> climbed 248.02
points, or 2.85 percent, to 8,943.81. The Standard & Poor's
500 Index <.SPX> advanced 26.11 points, or 2.89 percent, to
930.99. The Nasdaq Composite Index <> shot up 38.70
points, or 2.41 percent, to 1,647.40.
The Dow's 4.09 percent drop this week marks the worst
presidential election week for the blue chips since Harry
Truman upset Thomas Dewey in 1948. For the S&P and Nasdaq,
it's only the worst since the week in 2000 when there was no
decision in the George W. Bush-Al Gore election.
The S&P lost 3.9 percent for the week and the Nasdaq
finished the week down 4.3 percent.
Although a government report showed U.S. employers cut
payrolls by 240,000 in October, much more severely than
expected, analysts said the market had already taken into
account the bad news. The U.S. unemployment rate jumped in
October to 6.5 percent, the highest since March 1994. For
September, the nation's unemployment rate was 6.3 percent.
Highlighting the impact of the economic downturn on the
auto industry, General Motors <GM.N> and Ford <F.N> both
posted wider-than-expected quarterly losses. GM said liquidity
will fall short of the minimum needed to run its business by
the first half of next year without new funding or other
drastic action. For details, see [].
GM sank 9.2 percent to $4.36, while rival Ford rose 2
percent to $2.02.
Exxon Mobil <XOM.N> jumped 6.3 percent to $73.95, while
Chevron <CVX.N> added 4.8 percent to $73.46. U.S. front-month
crude <CLc1> gained 27 cents to settle at $61.04 a barrel as
the U.S. dollar slumped.
On the Nasdaq, wireless technology supplier Qualcomm
<QCOM.O> climbed 7.9 percent to $35.66 following quarterly
results released after Thursday's closing bell that beat
expectations.
Investors also snapped up shares of companies believed to
be better positioned to weather a slowing economy, including
utilities and pharmaceutical stocks. Johnson & Johnson
<JNJ.N>, a Dow component, gained 4 percent to $60.22 on the
New York Stock Exchange.
Wall Street received yet more evidence of a darkening
economic picture late Friday morning. The National Association
of Realtors Pending Home Sales Index, based on contracts
signed in September, fell 4.6 percent, versus economists'
forecast for a 3 percent drop.
Trading was moderate on the New York Stock Exchange, with
about 1.26 billion shares changing hands, below last year's
estimated daily average of roughly 1.90 billion, while on
Nasdaq, about 1.93 billion shares traded, below last year's
daily average of 2.17 billion.
Advancing stocks outnumbered declining ones on the New
York Stock Exchange by a ratio of about 7 to 3 while on the
Nasdaq, about 17 stocks rose for every 11 that fell.
(Reporting by Leah Schnurr; Editing by Jan Paschal)
