Wall Street heads into next week packing a better than expected February jobs report that has fired up visions of stronger economic recovery that could prove a turning point for equities.
The US Labor Department’s monthly report revealed on Friday that Mother Nature’s wintry blasts were no match for a US economy gaining steam. Stocks soared on the news, forging gains over the week after last week’s losses.
The Dow Jones Industrial Average rose 2.33 percent to close at 10,566.20. It was the first time the blue-chip Dow topped the 10,500-point threshold since January 20.
The technology-rich NASDAQ composite leaped 3.94 percent over the week to 2,326.35, its highest level since September 2008. The broad-market Standard & Poor’s 500 index advanced 3.10 percent to 1,138.70 points.
The market spent much of the past week waiting for the government’s monthly labor market report, largely shrugging off negative news as it braced for the key indicator of economic momentum, which this time delivered a powerful lift to sentiment.
The Labor Department said that nonfarm payrolls fell by 36,000, surprising most analysts who projected 67,000 job losses because of massive snow storms that crippled the country’s northeastern region.
The unemployment rate remained unchanged from 9.7 percent in January, instead of an expected rise to 9.8 percent.
“If this is the kind of jobs report we get with a record blizzard on the East Coast and unusually harsh weather in the Midwest, get ready for a blow-out positive payroll number next month,” said Brian Wesbury at FT Advisors.
Investors got a further boost when the Federal Reserve said consumer credit rose 2.4 percent or US$5 billion in January from December, the first rise since January 2009 and the biggest since July 2008.
“This was seen as a sign that Americans are gaining confidence in the economy. The report also suggested that banks may be more willing to lend money,” Scott Marcouiller at Wells Fargo Advisors said.
The market will find little new economic fuel in the next week to keep the momentum going, which could test the strength of investors’ convictions in the sustainability of the recovery.
The data calendar is relatively light throughout the week until Thursday, when the government reports the January trade balance and weekly initial unemployment claims.
Retail sales is the highlight on Friday, when investors will be looking to see if there is an increase in consumer spending, which accounts for two-thirds of economic activity and is crucial for recovery.
“The January trade balance is expected to widen slightly in response to higher oil prices,” IHS Global Insight economists Brian Bethune and Nigel Gaust said in a client note.
“February retail sales are expected to be close to flat — lower auto sales are expected to be offset by higher sales in other major channels,” they said.
Market action in the week ahead is “difficult to predict” given the dearth of major economic indicators, said Hugh Johnson of Johnson Illington Advisors.
“The mood started to pick up primarily because it looks as though the economy has not been hurt as much by the bad weather as we thought.”
Bonds slumped over the week. The yield on the 10-year Treasury bond rose to 3.682 percent Friday from 3.595 percent a week earlier and that on the 30-year bond climbed to 4.639 percent from 4.529 percent. Bond yields and prices move in opposite directions.
AIR SUPPORT: The Ministry of National Defense thanked the US for the delivery, adding that it was an indicator of the White House’s commitment to the Taiwan Relations Act Deputy Minister of National Defense Po Horng-huei (柏鴻輝) and Representative to the US Alexander Yui on Friday attended a delivery ceremony for the first of Taiwan’s long-awaited 66 F-16C/D Block 70 jets at a Lockheed Martin Corp factory in Greenville, South Carolina. “We are so proud to be the global home of the F-16 and to support Taiwan’s air defense capabilities,” US Representative William Timmons wrote on X, alongside a photograph of Taiwanese and US officials at the event. The F-16C/D Block 70 jets Taiwan ordered have the same capabilities as aircraft that had been upgraded to F-16Vs. The batch of Lockheed Martin
GRIDLOCK: The National Fire Agency’s Special Search and Rescue team is on standby to travel to the countries to help out with the rescue effort A powerful earthquake rocked Myanmar and neighboring Thailand yesterday, killing at least three people in Bangkok and burying dozens when a high-rise building under construction collapsed. Footage shared on social media from Myanmar’s second-largest city showed widespread destruction, raising fears that many were trapped under the rubble or killed. The magnitude 7.7 earthquake, with an epicenter near Mandalay in Myanmar, struck at midday and was followed by a strong magnitude 6.4 aftershock. The extent of death, injury and destruction — especially in Myanmar, which is embroiled in a civil war and where information is tightly controlled at the best of times —
China's military today said it began joint army, navy and rocket force exercises around Taiwan to "serve as a stern warning and powerful deterrent against Taiwanese independence," calling President William Lai (賴清德) a "parasite." The exercises come after Lai called Beijing a "foreign hostile force" last month. More than 10 Chinese military ships approached close to Taiwan's 24 nautical mile (44.4km) contiguous zone this morning and Taiwan sent its own warships to respond, two senior Taiwanese officials said. Taiwan has not yet detected any live fire by the Chinese military so far, one of the officials said. The drills took place after US Secretary
THUGGISH BEHAVIOR: Encouraging people to report independence supporters is another intimidation tactic that threatens cross-strait peace, the state department said China setting up an online system for reporting “Taiwanese independence” advocates is an “irresponsible and reprehensible” act, a US government spokesperson said on Friday. “China’s call for private individuals to report on alleged ‘persecution or suppression’ by supposed ‘Taiwan independence henchmen and accomplices’ is irresponsible and reprehensible,” an unnamed US Department of State spokesperson told the Central News Agency in an e-mail. The move is part of Beijing’s “intimidation campaign” against Taiwan and its supporters, and is “threatening free speech around the world, destabilizing the Indo-Pacific region, and deliberately eroding the cross-strait status quo,” the spokesperson said. The Chinese Communist Party’s “threats
RSS