Dow hits highest level since financial crisis

Reporting from New York —  The collapse of Lehman Brothers is feeling like a bad dream today.

The Dow Jones industrial average surged Friday morning, taking it past highs reached last year and up to the highest level since May 2008, before Lehman Brothers went bankrupt and the economy went into the toilet.

The Dow was recently up 139.64 points, or 1.1%, to 12,845.05. That brings it above the highs reached last April and July, which were killed by concerns about a double-dip recession in the United States and a European financial collapse.

The Dow is being pushed up today by new signs that the U.S. economy -- and the employment situation -- are on the mend. The morning began with one of the most promising employment reports in a long time, showing that the economy added 243,000 jobs, or 100,000 more than economists were expecting. That was enough to bring the unemployment rate down a notch to 8.3%.

A short while later, news hit that the service sector was growing faster than expected, according to a much-watched index from the Institute for Supply Management.

Together it was some of the strongest evidence to date that the U.S. economy is recovering faster than economists anticipated, and perhaps quickly enough to continue the market’s recent streak upward.

“Last year the wave of optimism quickly faded, much like it did the year before,” Steve Ricchiuto, an economist at Mizuho Securities, said in a note to clients Friday morning, referring to the stock market sags that followed surges in 2010 and 2011. “This time, though, we are less confident in that view and recognize that things have gotten somewhat better.”

The U.S. market is on track for its best day since the first day of the year, and for its fourth positive week in the last five weeks.

Along with the Dow, the Nasdaq composite index also passed last year’s highs today and was recently up 40.70 points, or 1.4%, to 2900.38. The benchmark Standard & Poor’s 500 is just below the highs of last year, trading up 1.2%, or 16.08 points to 1341.59 this morning.

The clearest threat to the rally is the European economic situation. But while the relationship between Greece and the European Union has been up in the air, the continent’s broader problems have been quiet recently.

Leading indexes are up 1.5% in Germany and 1.6% in England.

ALSO:

Lots of new jobs

Chain stores see sales jump in January

Investors aren’t all sold on Facebook IPO