US stocks rebound

Stocks rebounded today after a report on US unemployment showed unexpected improvement, and Intel predicted third-quarter chip sales would fall less than analysts had anticipated.

The Dow Jones industrials climbed more than 140 points, erasing a sharp decline on Thursday attributed to bad economic news, including sluggish productivity growth and disappointing retail sales.

Today’s gains capped a tumultuous week on Wall Street, with the Dow alternating triple-digit winning sessions with triple-digit losing sessions.

Despite the rally, the major indexes ended the week lower. For the week, the Dow fell 2.8%, the Nasdaq composite index lost 1.5% and the Standard & Poor’s 500 index declined 2.4%.

Today, the Dow rose 143.50 points, or 1.7%, to close at 8,427.20. It dropped 141 points on Thursday.

The broader market also moved higher. The Nasdaq rose 44.29 points, or 3.5%, to 1,295.29. The S&P 500 gained 14.77 points, or 1.7%, to close at 893.92.

Driving the increases was a government report showing that unemployment fell to 5.7% in August and that companies added 39,000 new jobs, the fourth consecutive monthly increase. Analysts had expected the rate to stay at 5.9% or edge up slightly for August.

Stock prices rallied during the first three weeks of August, but have largely fallen back since then.

With consumer confidence still fragile and businesses cautious about capital spending, analysts said the market remains susceptible to further volatility and declines.

Shares of Intel rose dlrs 1.11, or 7.4%, to dlrs 16.22 after the chip maker lowered its third-quarter sales estimates, but not by as much as Wall Street had feared. Shares of Advanced Micro Devices, a rival, rose 5 cents to dlrs 8.04.

Vivendi Universal got a boost after the Wall Street Journal, citing unnamed sources, reported that the company was in talks to sell its publishing unit for between dlrs 3 billion and dlrs 5 billion. Vivendi shares were up dlrs 1.63, or 14.4%, to dlrs 12.99.

However, RJ Reynolds Tobacco fell sharply after the company lowered its earnings forecast for the third quarter. Its shares declined dlrs 4.72, or 7.9%, to dlrs 52.58.

Advancing issues outnumbered decliners by about 7 to 3 on the New York Stock Exchange, where volume was light.

The Russell 2000 index, the barometer of smaller company stocks, gained 10.51 points, or 2.8%, to 391.57.