* U.S. employers unexpectedly cut 85,000 jobs in Dec
* Biotech boosts Nasdaq
* UPS lifts earnings optimism
* Dow up 0.1 pct, S&P up 0.3 pct; Nasdaq up 0.7 pct
* For up-to-the-minute market news, click STXNEWS/US
(Updates to close)
By Edward Krudy
NEW YORK, Jan 8 (Reuters) - U.S. stocks rose on Friday
after trading in the red most of the day as investors concluded
weak December jobs data wouldn't interrupt a trend of steady
economic recovery.
The S&P 500 and the Dow hit new 15-month highs while the
Nasdaq climbed to its highest level in 16 months.
The economy unexpectedly shed 85,000 jobs in December, but
analysts said this was not inconsistent with a slowly
recovering economy as the pace of monthly jobs losses have
declined sharply since the height of the recession.
In addition, November's payrolls report was revised to a
gain in jobs, bolstering that view.
"I don't think that we should expect that we're going to go
up in a straight line," said Linda Duessel, market strategist
at Federated Investors in Pittsburgh. "Last month of course was
revised up. This one will probably get revised at least in a
more positive direction."
The Dow Jones industrial average <> rose 11.33 points,
or 0.11 percent, at 10,618.19. The Standard & Poor's 500 Index
<.SPX> climbed 3.29 points, or 0.29 percent, at 1,144.98. The
Nasdaq Composite Index <> added 17.12 points, or 0.74
percent, at 2,317.17.
Analysts polled by Reuters had expected no non-farm job
losses in December from the previous month. A weaker report is
also supportive of the view that Federal Reserve will keep
interest rates low for a prolonged period, which is favorable
for stocks.
Losses were also curbed after shipping company United
Parcel Service Inc <UPS.N> boosted its fourth-quarter outlook
and said it will cut 1,800 jobs. Its shares rose nearly 5
percent and lifted hopes of strong corporate earnings when
Alcoa Inc <AA.N> kicks off the reporting season on Monday.
The first week of the year got off to a positive start. For
the week the Dow rose 1.8 percent, the S&P added 2.7 percent,
while the Nasdaq rose 2 percent.
The news from UPS also helped shares in rival Fedex Corp
<FDX.N>, which rose 2.5 percent to $84.99, and boosted the Dow
Jones Transportation average <.DJT> 1.8 percent.
Both UPS and FedEx are economic bellwethers because they
reflect trends in business and consumer spending.
Biotechnology companies were among top gainers on the
Nasdaq.
Teva Pharmaceutical Industries Ltd <TEVA.TA> <TEVA.O>
gained 4.4 percent to $59.34 a day after the world's largest
generic drugmaker set a revenue target for 2015 of $31 billion,
more than than double its current annual amount.
[]
Genzyme Corp <GENZ.O> advanced for a second day after a
source said billionaire investor Carl Icahn was considering a
proxy battle at the biotech company. [] Genzyme
was up 5.2 percent to $53.81 after a 4.4 percent advance on
Thursday.
Also helping the Nasdaq, Morgan Stanley started the
healthcare services sector with an 'attractive' view. Part of
that call included an 'overweight' rating for Express Scripts
<ESRX.O>, which rose 3.4 percent to $91.65.
Investors will now turn their attention to reports on
fourth-quarter earnings, which starts with Alcoa after the bell
on Monday.
Since the start of the year, analysts have revised up their
earnings estimates for seven out of ten S&P sectors.
Healthcare, financials, and consumer staples are the only three
sectors to see declines, according to Bespoke Investment
Group.
Alcoa's shares rose 2.5 percent to $17.02.
Volume was light on the New York Stock Exchange, with
slightly less than 1 billion shares changing hands, compared
with last year's estimated daily average of 2.18 billion. On
the Nasdaq, about 2.16 billion shares traded, above last year's
daily average of 1.63 billion.
Advancing stocks outnumbered declining ones on the NYSE by
a ratio of about 3 to 2, while advancing stocks beat decliners
on the Nasdaq by about 7 to 4.
(Reporting by Edward Krudy; Editing by Kenneth Barry)
