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Stocks jump after better-than-expected jobs report
Source: Agencies |
March 6, 2010, Saturday
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Online Edition
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STOCKS jumped yesterday after the government's employment report showed fewer jobs were cut in February than expected.
Major stock indexes climbed more than 1 percent, including the Dow Jones industrial average, which rose 122 points.
The Labor Department's monthly report is seen as the most important measure of the economy's health.
The better-than-expected jobs report helped push oil and other commodities higher. That helped energy and material companies like Exxon Mobil Corp. and Chevron Corp.
Apple Inc. got a big boost as well after the company said its iPad tablet computer will hit store shelves on April 3.
Employers cut 36,000 jobs last month, better than the 50,000 cuts forecast by economists polled by Thomson Reuters. The unemployment rate held steady at 9.7 percent. Economists were expecting it to rise to 9.8 percent.
Yesterday's gains, which followed a late-day rally on Thursday, suggests that investors are optimistic the US economy is improving. Though employers aren't yet adding full-time staff, jobs growth is fundamental to a recovery because it puts money in more workers pockets, allowing them to increase spending.
"We haven't won the game yet," said James Meyer, chief investment officer at Tower Bridge Advisors. "We're just getting back to neutral. You can't get from negative to positive without crossing zero."
The Dow rose 122.06, or 1.2 percent, to 10,566.20. The Standard & Poor's 500 index gained 15.73, or 1.4 percent, to 1,138.70, while the Nasdaq composite index added 34.04, or 1.5 percent, to 2,326.35.
Five stocks rose for every one that fell on the New York Stock Exchange, where volume rose to 1.1 billion shares from 960.8 million Thursday.
For the week, the Dow rose 2.3 percent, the S&P 500 index jumped 3.1 percent and the Nasdaq rose 3.9 percent.
Signs of future job growth were encouraging in the report. Temporary workers, which are often seen as a precursor to employers adding full-time staff, rose 48,000 last month. Average hourly earnings rose by 3 cents to US$22.46.
Analysts say Thursday's productivity report also provided positive signs about future jobs growth heading into the jobs report. Worker productivity rose by 6.9 percent in the fourth quarter.
Employers can only squeeze so much production out of current workers before they need to add more staff, said Michael Cannivet, portfolio manager at Palo Capital.
The Labor Department wouldn't quantify if severe snowstorms that pummeled the East Coast last month had any impact on the report. Economists estimated before the report that the storms could inflate job losses by 100,000 or more.
Jerry Harris, president and chief investment officer at Sterne Agee Asset Management, said March's results could be even better because the bad weather likely negatively affected February's data.
Energy companies were among the biggest winners on the day as oil rose US$1.29 to US$81.50 a barrel. Chevron shares rose US$1.22 to US$74.30, while Exxon Mobil rose US$1.07 to US$66.47.
Financial stocks also got a boost from the improved employment data, which might lead to fewer loan losses. A recovery in the labor market is "the most critical factor" in getting more people to keep up with their debts, said Edward Crotty, chief investment officer at Davidson Investment Advisors.
Bank of America Corp. rose 30 cents to US$16.70, while JPMorgan Chase & Co. climbed 89 cents to US$42.81.
After announcing the launch date for the iPad, Apple rose US$8.24, or 3.9 percent, to US$218.95.
Meanwhile, bond prices fell on signs of the improving economy. The yield on the benchmark 10-year Treasury note, which moves opposite its price, rose to 3.69 percent from 3.61 percent late Thursday.
The dollar fell against other major currencies, while gold rose.
The Russell 2000 index of smaller companies rose 13.55, or 2.1 percent, to 666.02.
Overseas markets rose on the US jobs report, and after a successful bond sale by debt-burdened Greece. Budget and debt problems in Greece have dogged the markets in recent months.
Britain's FTSE 100 rose 1.3 percent, Germany's DAX index gained 1.4 percent, and France's CAC-40 rose 2.1 percent. Japan's Nikkei stock average surged 2.2 percent.
Major stock indexes climbed more than 1 percent, including the Dow Jones industrial average, which rose 122 points.
The Labor Department's monthly report is seen as the most important measure of the economy's health.
The better-than-expected jobs report helped push oil and other commodities higher. That helped energy and material companies like Exxon Mobil Corp. and Chevron Corp.
Apple Inc. got a big boost as well after the company said its iPad tablet computer will hit store shelves on April 3.
Employers cut 36,000 jobs last month, better than the 50,000 cuts forecast by economists polled by Thomson Reuters. The unemployment rate held steady at 9.7 percent. Economists were expecting it to rise to 9.8 percent.
Yesterday's gains, which followed a late-day rally on Thursday, suggests that investors are optimistic the US economy is improving. Though employers aren't yet adding full-time staff, jobs growth is fundamental to a recovery because it puts money in more workers pockets, allowing them to increase spending.
"We haven't won the game yet," said James Meyer, chief investment officer at Tower Bridge Advisors. "We're just getting back to neutral. You can't get from negative to positive without crossing zero."
The Dow rose 122.06, or 1.2 percent, to 10,566.20. The Standard & Poor's 500 index gained 15.73, or 1.4 percent, to 1,138.70, while the Nasdaq composite index added 34.04, or 1.5 percent, to 2,326.35.
Five stocks rose for every one that fell on the New York Stock Exchange, where volume rose to 1.1 billion shares from 960.8 million Thursday.
For the week, the Dow rose 2.3 percent, the S&P 500 index jumped 3.1 percent and the Nasdaq rose 3.9 percent.
Signs of future job growth were encouraging in the report. Temporary workers, which are often seen as a precursor to employers adding full-time staff, rose 48,000 last month. Average hourly earnings rose by 3 cents to US$22.46.
Analysts say Thursday's productivity report also provided positive signs about future jobs growth heading into the jobs report. Worker productivity rose by 6.9 percent in the fourth quarter.
Employers can only squeeze so much production out of current workers before they need to add more staff, said Michael Cannivet, portfolio manager at Palo Capital.
The Labor Department wouldn't quantify if severe snowstorms that pummeled the East Coast last month had any impact on the report. Economists estimated before the report that the storms could inflate job losses by 100,000 or more.
Jerry Harris, president and chief investment officer at Sterne Agee Asset Management, said March's results could be even better because the bad weather likely negatively affected February's data.
Energy companies were among the biggest winners on the day as oil rose US$1.29 to US$81.50 a barrel. Chevron shares rose US$1.22 to US$74.30, while Exxon Mobil rose US$1.07 to US$66.47.
Financial stocks also got a boost from the improved employment data, which might lead to fewer loan losses. A recovery in the labor market is "the most critical factor" in getting more people to keep up with their debts, said Edward Crotty, chief investment officer at Davidson Investment Advisors.
Bank of America Corp. rose 30 cents to US$16.70, while JPMorgan Chase & Co. climbed 89 cents to US$42.81.
After announcing the launch date for the iPad, Apple rose US$8.24, or 3.9 percent, to US$218.95.
Meanwhile, bond prices fell on signs of the improving economy. The yield on the benchmark 10-year Treasury note, which moves opposite its price, rose to 3.69 percent from 3.61 percent late Thursday.
The dollar fell against other major currencies, while gold rose.
The Russell 2000 index of smaller companies rose 13.55, or 2.1 percent, to 666.02.
Overseas markets rose on the US jobs report, and after a successful bond sale by debt-burdened Greece. Budget and debt problems in Greece have dogged the markets in recent months.
Britain's FTSE 100 rose 1.3 percent, Germany's DAX index gained 1.4 percent, and France's CAC-40 rose 2.1 percent. Japan's Nikkei stock average surged 2.2 percent.
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