A trader works on the floor of the New York...

A trader works on the floor of the New York Stock Exchange. A drop in the unemployment rate to a two-year low helped the Dow rise 56.99 points, or 0.5 percent, to 12,376.7. (March 14, 2011) Credit: Getty/STAN HONDA

A drop in the unemployment rate to a two-year low sent stocks higher Friday.

The report helped send the Dow Jones industrial average to a new 2011 high during early trading. Stocks then pared those gains in the afternoon as oil prices hit new 30-month highs. Crude oil jumped $1.22 to settle at $107.94.

The Dow rose 56.99 points, or 0.5 percent, to 12,376.72. The average of its 30 large company stocks gained 1.3 percent for the week. The Dow has already gained 6.9 percent this year. That's the best start since 1999.

The Standard & Poor's 500 index rose 6.58, or 0.5 percent, to 1,332.41. The Nasdaq composite rose 8.53, or 0.3 percent, to 2,789.60.

The Institute of Supply Management reported a slight slowing in manufacturing growth during March. The trade group's index of manufacturing activity slipped to 61.2 from February's 61.4. The drop was largely expected after manufacturing hit its highest level since May 2004 during February.

The Commerce Department delivered more bad news on the construction industry. The government said construction spending fell in February to its lowest level since 1999.

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