YAHOO [BRIEFING.COM]: Stocks staged their third straight advance on
the back of a better-than-expected jobs report to eke out another weekly
advance -- its ninth in 10 weeks.
Market participants were generally pleased to learn that the jobs
picture continues to improve, but excitement was limited by the belief that
such a trend could make it less necessary for further economic or monetary
stimulus. The headline unemployment rate remains at 8.3%, as had been broadly
predicted, but nonfarm payrolls increased in February by 227,000 while nonfarm
private payrolls jumped by 233,000. Respective increases of 206,000 and 220,000
had been broadly expected.
Little attention was paid to news that the trade deficit increased
in January to $52.6 billion, which is greater than the $48.2 billion deficit
that economists surveyed by Briefing.com had generally expected to follow
December's upwardly revised deficit of $50.4 billion.
Although stocks started the session in positive territory, it took
some time to muster enough strength to make a meaningful move higher. Even
after they did, though, the effort to run higher was stymied by resistance
at the S&P 500's multi-year closing high of 1374.
Stocks hugged that line for several hours before retreating in
response to headlines that the ISDA ruled that a credit event occurred with
respect to
Gains among stocks may have been checked late in the day, but the
S&P 500 still managed to settle high enough lock in another weekly gain.
Although it amounted to only 0.1%, it still stands as the ninth positive weekly
performance in 10 weeks.
Traditionally a defensive holding, the greenback gained about 1%
against a basket of major foreign currencies today. Its move was especially
pronounced against the euro, sterling pound, and Japanese yen. The dollar's
advance really gained momentum with the release of the monthly payrolls report.
A generally positive tone helped take the Volatility Index
back below 17 for some time. It settled narrowly above that line, but remained
near multi-month lows.
Trade this week actually started on a weak note amid concerns that
global economic growth would be adversely impacted by China's 2012 growth
forecast of 7.5%, which stands as its lowest target since 2004.
Market participants were hardly encouraged by better-than-expected
domestic data that featured an ISM Service Index reading of 57.3 for February.
A reading of 57.0 had been expected to follow the 56.8 that was printed in
the prior month. Separately, factory orders fell during January by 1.0%,
but that was still less severe than the 1.9% drop that had been widely
expected.
BP (BP
46.69, -0.42) announced early this week that it has struck a $7.8 billion
settlement for claims filed following the Gulf oil spill in 2010. The payment
will be made from the $20 billion compensation fund set aside by the
company.
Trade on Tuesday was relatively dramatic in that the S&P 500
fell 1.5% to suffer its worst one-day drop in almost three months. The action
came on the heels of weak action abroad, where markets remained concerned about
the implications of slower growth in China and news that eurozone
GDP declined by 0.3% in the fourth quarter, unrevised from its preliminary
reading. The disconcerting macro picture came as the stock market began to show
fatigue during its run to a new multi-year high in the preceding week.
Widespread weakness and concern that stocks were possibly setting
up for a correction caused the Volatility Index to spike more than 15%, putting
it back near its monthly high.
Stocks didn't take long to recover from their sell-off, although
the mid-week dose of data wasn't all that exciting.
The latest ADP Employment Change indicated that private payrolls climbed
by 216,000 in February, on par with the increase of 218,000 that had been
broadly expected. The February figure marked an improvement over the upwardly
revised increase of 173,000 private payrolls reported for January.
Fourth quarter productivity was revised upward to reflect an
increase of 0.9% to narrowly exceed the increase of 0.8% that had been broadly
forecasted. However, unit labor costs were also revised higher, but the 2.8%
increase was considerably more than the 1.1% increase that had been widely
anticipated.
Consumer credit climbed to $17.8 billion in February from a
downwardly revised $16.3 billion in the prior month. Economists polled by
Briefing.com had forecasted, on average, a decline to $12.0 billion.
Although data did little to drive action, Financials were a source
of leadership as they rebounded from their slump in the prior session. The
Consumer Discretionary sector also shined, such that American Eagle (AEO 15.54, +0.91) rallied hard despite a
disappointing quarterly report and forecast.
General
Electric (GE 19.04, +0.01) benefited from news that
management continues to expect double-digit revenue growth in global growth
regions. Apple
(AAPL 545.17, +3.18) shares responded negatively to the
company's unveiling of its latest iPad, but on
Thursday it shrugged off news that the Justice Department claims that the
company colluded to raise electronic book prices.
Stocks built on their mid-week rebound with a broad-based move that
provided the second half of the best back-to-back performance for the S&P
500 in more than three months.
Consumer discretionary plays performed well once again as Hot Topic (HOTT 10.01, +0.15) and Coach (COH 77.31, +0.52) climbed.
Shares of HOTT hit a multi-year high in response to stronger-than-expected earnings,
upside guidance, and a dividend hike. Shares of COH were carried to a record high following encouraging comments from company
management.
AIG (AIG
28.25, -0.06) faltered in the face of it all after it was learned that the
Treasury Department filed to offer more than 200 million common shares of the
company. Shares of the insurance giant had displayed strength earlier in the
week amid news that the company sold $6 billion worth of ordinary shares of its
There weren't any surprises at the latest European Central Bank
meeting, which culminated with the ECB's
target interest rate still at 1.00%. The Bank of
Overall action among commodities was actually weak this morning,
but the CRB Index managed to bounce to a 0.5% gain, booking its second straight
advance. Despite that, it still suffered a 1.1% weekly loss, which comes on top
of the 1.5% weekly loss suffered the prior week.
Oil prices were down modestly at the open of pit trade, but the
energy component closed the day at $107.40 per barrel for a 0.7% gain. Natural
gas was able to build on early strength to settle at $2.32 per MMBtu and score itself a 2.2% gain after it had booked its
worst close in a decade the day before.
Precious metals were down on the order of 1% or more this morning,
but both gold and silver rallied to impressive gains. Specifically, gold
settled at $1711.20 per ounce for a 0.7% gain, while silver scored a 1.1% gain
by settling at $34.21 per ounce.
The latest weekly jobless claims count totaled 362,000, which is up
8,000 from the prior week and slightly more than the 355,000 claims that had
been broadly expected. DJ30 +14.08 NASDAQ +17.92 NQ100 +0.4% R2K +1.3% SP400
+0.9% SP500 +4.96 NASDAQ Adv/Vol/Dec 1806/1.57
bln/724 NYSE Adv/Vol/Dec 2088/719 mln/889