NEW YORK — The best week for the stock market in more than two years ended with major indexes nearly unchanged Friday.
A surprise drop in the U.S. unemployment rate sent stocks higher in early trading, but the gains fizzled throughout the afternoon. European stock indexes and the euro rose after German Chancellor Angela Merkel made a speech pushing for tighter rules on government spending.
The Dow Jones industrial average dropped 0.61 to close at 12,019.42. The Dow ended the week up 7 percent, the largest weekly gain since July 2009.
Bank stocks rose the most. JPMorgan Chase jumped 6.1 percent, the most among the 30 stocks in the Dow. Morgan Stanley leapt 6.9 percent, the second-biggest gain of any stock in the Standard & Poor’s 500.
The unemployment rate fell to 8.6 percent last month, the lowest level in 2 1/2 years. Economists had expected the rate to stay at 9 percent. A key reason the rate fell so much was that more than 300,000 people gave up looking for work and are no longer counted as unemployed.
Merkel said the 17 countries that use the euro must quickly restore market confidence by making financial controls stricter. Bond yields for Spain and Italy fell, a sign that investors are becoming more confident in the ability of those countries to pay their debt. France’s CAC-40 and Britain’s FT-SE each rose 1.1 percent.
The Nasdaq composite inched up 0.73 to 2,626.93. The S&P 500 fell 0.30 to 1,244.28 but surged 7.4 percent over the week.
The Dow’s weekly gain of 787 was second only to a 946-point gain in October 2008.
“This market has been gripped with fear for a long time,” said Peter Cardillo, chief market economist at Rockwell Global Capital. “And I think some of these fear factors are beginning to dissipate.”
