Friday’s job data ease concerns of significant slowdown in economic growth giving market the required boost
US Market posted its first seven-straight day gains in current year on Monday. While Dow was up for the 7th consecutive day, S&P 500 was up for the 5th consecutive day. Crude oil futures tanked almost 4.3% in a single day but the Energy sector's resilience in the face of falling oil prices for a fourth consecutive session acted as a source of market support. Ongoing mergers and acquisition activity also remained the key factor behind the market's momentum.
After today’s close, Dow is 220 points below its record close on 20 February. The last time the Dow had seven higher closes in a row was in June, 2005.
20 out of 30 stocks closed higher on Monday. For the day (9 April, Friday) the Dow Jones Industrial Average closed higher by 8.94 points at 12539.14, Nasdaq lower by 2.16 points at 2469.18 and S&P 500 higher by 0.86 points at 1444.61. Mc Donalads, Intel, DuPont, Alcoa and American Express were the main Dow winners while Altria, H-P, Exxon Mobil and Boeing were the main Dow losers.
With this continuous 7 days of winning streak, Dow is up by 2.2% on these 7 days. S&P 500 is up by 1.7%.
Of the six sectors closing higher today, Materials paced the way following reports that Dow Chemical was being acquired by private investors at a $50 bln offer. The stock jumped 4.9% to close at $49.63. Among other major stocks, Exxon Mobil closed lower by 0.5% as crude oil plunged.
Tech shares were hit early after Advanced Micro Devices lowered its first-quarter revenue forecast and said it would aim to cut $500 million in capital spending in 2007. The scrip which has already shed almost 40% since 2007 rebounded 3.8% today to close at $13.35. Wall Street's enthusiasm for AMD also helped arch-rival Intel whose shares were up 2.7% to $20.10. Intel was responsible for almost 5 point gain of Dow.
Friday’s upbeat jobs data gives an early boost to market but reminds that rate cut is far away
When market opened in the morning, stocks got the pending lift from Friday’s job market report. The Labor Department released a surprisingly positive March jobs report on Friday where it said 180,000 jobs were added in March, more than the expected 168,000, and the jobless rate fell to 4.4% from 4.5% in February. But the data also served as another reminder that the Fed won't be cutting interest rates anytime soon,
The Industrials sector was in focus after Berkshire Hathaway disclosed that it took a 10.9% stake in Burlington Northern Santa Fe. The news earmarked Railroads as the day's best performer and also charged up transportation stocks which also benefited from oil's biggest decline in three months.
Crude futures witnessed their biggest slide in 3 months as risk premium unwounded on the first trading day at Nymex after Iran released the British hostages last Thursday. Crude-oil futures for light sweet crude for May delivery closed at $61.51/barrel (lower by $2.77/barrel or 4.31%) on the New York Mercantile Exchange. Crude prices fell today on speculation that an Energy Department report will show U.S. inventories jumped last week as refiners unexpectedly shut units. The rollover from the May contract to the June contract is believed to have started early and is further weakening crude prices.
Trading volumes were light with 1.260 billion shares exchanging hands on the New York Stock Exchange and 1.761 billion on the Nasdaq stock market. Declining issues slightly outpaced gainers on the NYSE, and by 16 to 13 on the Nasdaq.
No major economic reports are on the schedule for this week. Market's focus will be on quarterly results with Alcoa's earning report after Tuesday's closing bell.