Stocks jump on strong jobs report

A drop in the unemployment rate propelled the Dow Jones industrial average Friday to its highest close since May 2008, before the financial meltdown later that year. The Nasdaq composite index hit an 11-year high.

The Dow jumped 156.82 points to 12,862.23, its highest mark since May 19, 2008, about four months before Lehman Brothers investment bank collapsed. In May 2008, credit markets were tightening up, subprime mortgages were going sour and investment bank Bear Stears had already collapsed.

Before the market opened, the Labor Department said the economy added 243,000 jobs in January. It was the strongest job growth in nine months.

The increase in hiring pushed the unemployment rate down to 8.3 percent, the lowest since February 2009.

The surprising data gave financial markets a morning jolt that lasted throughout the trading day. The Nasdaq composite index closed 45.98 points higher at 2,905.66, its highest since December 2000, during the steep decline that followed the dot-com stock bubble.

The Standard & Poor's 500 index added 19.36 points, or 1.46 percent, to 1,344.90, its highest close since last July."In this economy," said Lawrence Creatura, an equity portfolio manager at Federated Investors, "only one variable matters right now, and that variable is employment."