Wall Street turns its focus to the job market in the coming week with a key labor market report due after a weekly loss for the first time in three weeks for US stocks.
Friday’s employment report for this month may provide a direction for the market, which has seen choppy trading so far this year.
“The rolling correction since mid-January remains the dominant trend and we expect more well into March,” Wells Fargo Advisors chief market strategist Al Goldman said.
“This is all normal action after the 70 percent rally and the mood in Washington and among most Americans. The improving economy will eventually win out, but not right now,” he said.
In the past week, the Dow Jones Industrial Average fell 0.7 percent to end at 10,325.26. The blue-chip barometer rose a hefty 2.6 percent this month.
The technology-dominated NASDAQ composite shed 0.3 percent for the week to 2,238.26 and ended the month with a robust gain of 4.2 percent.
The broad Standard & Poor’s 500 index shrank 0.4 percent for the week to 1,104.49, but rose 2.9 percent for the month.
Analysts said the market would continue to be dogged by unemployment concerns and woes in the housing sector, which was at the epicenter of the financial crisis.
US consumer confidence will remain under stress as a result of the near double-digit jobless rate.
“We continue to believe that the economy is slowly improving, coming out of its deep recession hole, but most likely at a pace that will continue to try the patience of investors and the unemployed,” said Frederic Dickson, chief market strategist at DA Davidson & Co.
The US government on Friday revised US economic growth upward to 5.9 percent in the fourth quarter from an initial estimate of 5.7 percent, surprising most analysts who had expected no change in the first estimate.
It followed a 2.2 percent increase in GDP in the third quarter, the first economic growth after four quarters of contraction.
While consumer spending, which drives two-thirds of US economic activity, increased 1.7 percent, it slowed from a rise of 2.8 percent in the third quarter.
The Conference Board, a business research firm, also said earlier in the week that its consumer confidence index fell to 46.0 this month — its lowest reading since April last year — from an upwardly revised 56.5 last month.
“On the flip side, although recovering, the consumer is facing numerous headwinds and after a nice move in 2009, we believe the consumer discretionary sector is poised to underperform,” Brad Sorensen of Charles Schwab & Co said.
“Wage gains are relatively weak, unemployment remains elevated, and retailers are having trouble maintaining pricing power to any degree,” he said.
But Gregory Drahuschak of Janney Montgomery Scott said that while numerous economic challenges remained, “for the intermediate-term, corporate earnings improvement should be enough to keep the market in reasonably good condition.”
Overall earnings results continued to come in ahead of even the most optimistic forecasts and outlook remains bullish.
While the analysts are still raising their earnings estimates, they are starting to make some adjustments to reflect all the positive earnings surprises, said Ed Yardeni, president of Yardeni Rsearch.
In the week ahead, IHS Global Insight analysts said the unusually cold weather conditions this month and other special factors could affect the monthly economic indicators to be released, including those for motor vehicle sales and payrolls employment.
Tropical Storm Gaemi strengthened into a typhoon at 2pm yesterday, and could make landfall in Yilan County tomorrow, the Central Weather Administration (CWA) said yesterday. The agency was scheduled to issue a sea warning at 11:30pm yesterday, and could issue a land warning later today. Gaemi was moving north-northwest at 4kph, carrying maximum sustained winds near its center of up to 118.8kph and gusts of 154.8kph. The circumference is forecast to reach eastern Taiwan tomorrow morning, with the center making landfall in Yilan County later that night before departing from the north coast, CWA weather forecaster Kuan Shin-ping (官欣平) said yesterday. Uncertainty remains and
SEA WARNING LIKELY: The storm, named Gaemi, could become a moderate typhoon on Wednesday or Thursday, with the Taipei City Government preparing for flooding A tropical depression east of the Philippines developed into a tropical storm named Gaemi at 2pm yesterday, and was moving toward eastern Taiwan, the Central Weather Administration (CWA) said. Gaemi could begin to affect Taiwan proper on Tuesday, lasting until Friday, and could develop into a moderate typhoon on Wednesday or Thursday, it said. A sea warning for Gaemi could be issued as early as Tuesday morning, it added. Gaemi, the third tropical storm in the Pacific Ocean this typhoon season, is projected to begin moving northwest today, and be closest to Taiwan on Wednesday or Thursday, the agency said. Today, there would likely
DISRUPTIONS: The high-speed rail is to operate as normal, while several airlines either canceled flights or announced early departures or late arrivals Schools and offices in 15 cities and counties are to be closed today due to Typhoon Gaemi, local governments announced last night. The 15 are: Taipei, New Taipei City, Taoyuan, Tainan, Keelung, Hsinchu and Kaohsiung, as well as Yilan, Hualien, Hsinchu, Miaoli, Chiayi, Pingtung, Penghu and Lienchiang counties. People should brace for torrential rainfall brought by the storm, with its center forecast to make landfall on the east coast between tonight and tomorrow morning, the Central Weather Administration (CWA) said. The agency issued a sea warning for the typhoon at 11:30pm on Monday, followed by a land warning at 11:30am yesterday. As of
CASUALTY: A 70-year-old woman was killed by a falling tree in Kaohsiung as the premier warned all government agencies to remain on high alert for the next 24 hours Schools and offices nationwide are to be closed for a second day today as Typhoon Gaemi crosses over the nation, bringing torrential rain and whipping winds. Gaemi was forecast to make landfall late last night. From Tuesday night, its outer band brought substantial rainfall and strong winds to the nation. As of 6:15pm last night, the typhoon’s center was 20km southeast of Hualien County, Central Weather Administration (CWA) data showed. It was moving at 19kph and had a radius of 250km. As of 3pm yesterday, one woman had died, while 58 people were injured, the Central Emergency Operation Center said. The 70-year-old