Exhuberance on Wall Street

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NEW YORK: Markets soared on a lower-than-expected rise in labor costs. The Labor Department report of a modest 0.6 percent rise in wages and benefits convinced investors that the Fed won't tighten interest rates at its next meeting three weeks from now, says TIME's Wall Street columnist Daniel Kadlec. "It's hard to remember the last time the markets reacted so eagerly to this report." Indeed, now that the Dow has almost completely erased the sobering slide that began March 11, the rest of the market seemed today to have to caught a euphoria that Kadlec called "incredible." Yields on 30-year Treasury bonds fell to 6.99 percent, the lowest in a month. NASDAQ rose 25.60 and AMEX was up 6.83; the S&P was up 21.09. And at the New York Stock Exchange, home of the Dow, advancing issues outnumbered decliners by nearly a 4-to-1 margin. "Normally, the markets would have waited until next week's monthly unemployment numbers," Kadlec said. "They're clearly expecting a reprieve from the Fed. Is this another case of irrational exhuberance? Says Kadlec: It's a long time 'till May 20."