By MATT JARZEMSKY

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Associated Press

A screen on the trading floor of the New York Stock Exchange on Friday shows the Dow Jones industrial average above 14000 for the first time since October 2007.

Fresh off a blowout January, stocks started February with a bang, as telecom shares led a broad rally.

The telecom sector in the Standard & Poor's 500-stock index jumped 1.9%, its biggest gain since Jan. 2, as Verizon Communications (VZ) climbed 95 cents, or 2.2%, to $44.56, and AT&T (T) advanced 72 cents, or 2.1%, to 35.51.

Meanwhile, the Dow Jones Industrial Average advanced 149.21 points, or 1.1%, to 14009.79, topping 14000 for the first time since October 2007. The blue-chip index, which advanced 0.8% on the week, is 155 points from breaking its record close.

Fresh off a blowout January, stocks started February with a bang. WSJ "MarketBeat" reporter Paul Vigna joins The News Hub with a look at the day in the markets.(PHoto: Getty Images)

Just five stocks in the S&P 500 rose more than 4%, but the index had a deep enough bench to post its second-biggest daily gain this year. The S&P 500 added 15.06 points, or 1%, to 1513.17, up 0.7% for the week. The Nasdaq Composite Index rose 36.97 points, or 1.2%, to 3179.10, rising 0.9% on the week.

Financials and materials shares were among other top gainers. Bank of America (BAC) led the Dow industrials, climbing 39 cents, or 3.4%, to 11.71.

Upbeat economic reports underpinned the gains. The Labor Department said job-growth readings for November and December were higher than initially reported. The Institute for Supply Management's January manufacturing purchasing managers' index, a measure of factory activity, rose more than economists expected. A preliminary reading of the Thomson-Reuters and University of Michigan consumer-sentiment index for January also rose more than expected. Construction spending for December increased.

European markets were mostly higher, with the Stoxx Europe 600 up 0.3%, after Markit's euro-zone purchasing managers' index contracted at the slowest rate in 11 months. Spanish stocks bucked the trend by selling off after a ban on short selling, or betting against shares, was lifted. The IBEX 35 index dropped 1.6%.

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Traders work on the floor of the New York Stock Exchange.

Asian markets were broadly higher on the back of strong Chinese manufacturing data and further weakness in the yen. China's Shanghai Composite Index climbed 1.4% after HSBC (HSBA.LN)'s January purchasing managers' index rose to a two-year high. The index climbed 5.6% on the week. Japan's Nikkei Stock Average gained 0.5% to finish at a 52-week high, up 2.4% for the week.

Crude-oil prices rose 0.3%, to settle at $97.77 a barrel, while gold gained 0.5%, to settle at $1,669.40 a troy ounce. The dollar rallied versus the yen and fell against the euro. The 10-year Treasury note fell in price, pushing its yield up to 2.017%.

In other stock news, Merck (MRK) slipped 1.42, or 3.3%, to 41.83, the biggest decline among blue chips, after the drug maker's fourth-quarter profit slumped. Last year's loss of patent protection for asthma treatment Singulair continued to pressure sales.

Tyson Foods (TSN) climbed 68 cents, or 3.1%, to 22.80, after the meat processor's fiscal first-quarter earnings rose more than analysts had expected. Average sales prices for Tyson's chicken and beef rose.

(FB) Google (GOOG) rose 19.91, or 2.6%, to 775.60, topping last October's peaks to hit an all-time high.

McKesson (MCK) dropped 2.04, or 1.9%, to 103.19, after the medical-products distributor's fiscal third-quarter earnings missed forecasts and the company trimmed its full-year outlook.

Audience (ADNC) surged 1.88, or 15%, to 14.10, after the smartphone audio-processing-technology company reported better-than-expected fourth-quarter earnings and said it expects to report a profit for the current quarter. Analysts had projected a loss.

Write to Matt Jarzemsky at matthew.jarzemsky@dowjones.com