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Market rises on unemployment decline

May's jobs report kicks off the day, indicating that the unemployment rate fell for the first time in eight months.

    May's jobs report kicked off the day Friday, indicating that the unemployment rate fell for the first time in eight months.

    At the opening bell, the Dow Jones industrial average was up 4.62 to 10,916.56. The Nasdaq added 20.26 to 2,130.75. Investors also awaited May manufacturing numbers and mulled over more profit warnings from the semiconductor sector.

    Jobs data was better than expected, as the unemployment rate fell to 4.4 percent. May nonfarm payroll numbers remained weak, however. The number of workers on U.S. payrolls outside the farm sector fell by 19,000--a modest drop that was close to the 17,000 decline expected. May's average hourly wages were up 0.3 percent as forecast.

    The National Association of Purchasing Management also is to issue its report on May manufacturing after Friday's opening bell. The report is expected to show a slight increase to 43.7 percent from 43.2 percent in April. That would indicate a small expansion of the overall economy, although manufacturing would still be declining.

    Also due out is an April report on construction spending from the government. It's expected to show a 0.2 percent gain, much slower than the 1.3 percent advance in March.

    The day's most important economic reports--on employment and manufacturing for May--will help investors gauge the state of the U.S. economy and how likely the Federal Reserve is to slash interest rates again to stop its downward curve.

    Stocks to watch

  • Altera was one of many semiconductor-related stocks in the news Friday. The programmable-semiconductor maker said second-quarter sales will decline 25 percent from the prior period, more than the 20 percent drop it predicted in April.

    The 25 percentage point slide implies second-quarter sales of about $215.6 million, 9 percent below the mean sales forecast of $237.8 million, as compiled by First Call.

    The company cited a greater-than-expected drop in sales outside the United States, in what is its second consecutive profit warning amid one of the worst slumps in the chip industry.

  • Novellus Systems also changed its outlook for its second quarter, but its news was more favorable. The maker of equipment used to build circuits on semiconductors estimated that second-quarter profit will be 40 cents a share, a penny more than the average forecast of analysts polled by First Call.

  • Integrated Device Technology warned that its first quarter isn't going to be as good as expected. The semiconductor maker said it expects revenue of $120 million in the first quarter ending July 1, less than the $153 million average forecast of three analysts surveyed by First Call.

    Reuters contributed to this report.