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S&P 500 closes at record, led by energy, tech shares

April 30, 2013 By Leave a Comment

S&P 500 closes at record, led by energy, tech shares

() – The S&P 500 index ended at an all-time high on Monday as growth-oriented stocks, including energy and technology, lead the way to the index’s sixth rise in the past seven sessions.

Stronger-than-expected housing data also boosted the market, as did Italy’s formation of a new government, ending months of uncertainty and raising hopes for new policies to promote growth in the ’s third-largest economy.

Pressure has grown on the European Central Bank to lower interest rates with the euro zone mired in recession. Money market traders are evenly split on whether the ECB will cut rates at its meeting on Thursday, according to a Reuters poll.

Wall Street followed higher as Enrico Letta urged a focus on and away from austerity measures in his inaugural speech.

“After the election there was a lot of uncertainty about whether Italy could form a government, so now there is not only a great deal of relief over that, but also expectations for additional from the ECB,” said Alec Young, global equity strategist at S&P Equity Research in New York.

The industrial average . was up 106.20 points, or 0.72 percent, at 14,818.75. The Standard & Poor’s 500 Index .SPX was up 11.37 points, or 0.72 percent, at 1,593.61. The Nasdaq Composite Index .IXIC was up 27.76 points, or 0.85 percent, at 3,307.02.

The U.S. Federal Reserve will also meet this week for a two-day session beginning on Tuesday. The Fed is expected to maintain its stimulus policy. Data on Monday showing muted inflation gave the Fed room for accommodative measures.

Also lifting markets was Apple Inc (.O), which jumped 3.1 percent to $430.12 after taking for what would be its first debt sale. Technology stocks .SPLRCT rose 1.7 percent, making the sector the best-performing on Monday.

Among energy shares, Chevron Corp (CVX.N) rose 1.1 percent to $121.32.

A report showed contracts to buy previously owned homes rose last month to their highest level since April 2010, showing underlying strength in the housing market recovery, even though the pace of sales growth has cooled in recent months.

The S&P 500 closed just barely above its previous record hit earlier this month of 1,593.37.

“The market’s trend continues to be higher, but it is still attractive at these valuations,” said Young, who has a 12-month target of 1,670 for the S&P.

About 71 percent of New York Stock Exchange-listed companies closed higher while 65 percent of companies traded on the Nasdaq ended in positive territory.

Volume was light, with about 5.10 billion shares changing hands on the New York Stock Exchange, the Nasdaq and NYSE MKT, below the daily average so far this year of about 6.36 billion shares.

Moody’s Corp (MCO.N) was the S&P 500′s top percentage gainer, jumping 8.3 percent to $59.69 after the company settled a lawsuit alleging that it had misled investors about the safety of risky debt vehicles it had rated.

McGraw-Hill Cos (MHP.N), whose Standard & Poor’s unit said it settled similar suits, rose 2.8 percent to $53.45.

Roper Industries Inc (ROP.N) fell 3.8 percent to $118.68 after reporting first-quarter revenue that missed expectations, though it raised its full-year profit outlook.

Of the 274 companies in the S&P 500 that have reported earnings to date for current season, 69 percent have beat analysts’ expectations and 43.2 percent have reported revenue above expectations.

The second half of the may not be as strong as the first one, data showed.

(Editing by Nick Zieminski and Kenneth Barry)

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S&P posts 2013′s worst weekly drop on jobs data

April 6, 2013 By Leave a Comment

S&P posts 2013s worst weekly drop on jobs data

() – Stocks ended their worst week this year with losses on Friday after a weaker-than-expected jobs report undermined confidence in the economy and first- growth.

The jobs data, which showed employers hired at the slowest pace in nine months, was the latest in a series of disappointing economic reports.

Companies begin to report quarterly earnings next week, which is likely to be another concern for investors in light of recent . Analysts’ estimates for in the first quarter have fallen since late last year, according to Thomson .

“I think could be less than stellar again. Given market performance to date, we could see some softness in the market because we’ve generated some healthy returns already,” said Natalie Trunow, chief investment officer of equities at Calvert Investment Management, which has about $13 billion in assets.

Stocks had been rallying on the Fed’s promise to keep providing stimulus and on mostly improving U.S. economic data. The S&P 500 is up 8.9 percent since the start of the year.

The S&P 500 was down 1 percent for the week. All but three of the S&P 500′s 10 industry sectors posted declines.

The government’s job report showed 88,000 jobs were added in March, less than half economists’ average forecast of 200,000. The dipped to 7.6 percent from 7.7 percent, largely due to people dropping out of the work force.

Among recent weak data, a report Monday showed U.S. factory activity grew at the slowest rate in three months in March.

The S&P’s biggest percentage decliner was network gear maker F5 Networks Inc (FFIV.O), which dropped 19 percent to $73.21 a day after forecasting quarterly earnings and revenue well below Wall Street’s expectations.

The average . was down 40.86 points, or 0.28 percent, at 14,565.25. The Standard & Poor’s 500 Index . was down 6.70 points, or 0.43 percent, at 1,553.28. The .IXIC was down 21.12 points, or 0.66 percent, at 3,203.86.

For the week, the Dow declined 0.1 percent while the Nasdaq dropped 1.9 percent. The Russell 2000 index .TOY fell 3 percent for the week, its worst weekly decline since June.

Several of F5′s competitors were also sharply lower, with Juniper Networks (JNPR.N) off 3.1 percent at $17.55 and Citrix Systems (CTXS.O) down 1.2 percent at $68.90.

Airline stocks were hit after J.P Morgan Securities cut its revenue expectations for U.S. airlines by 2 percent to 3 percent for 2013 and 2014 and said it expects monthly revenue per available seat mile to turn negative for some airlines, partly due to the federal government’s automatic spending cuts.

Delta Airlines Inc (DAL.N) fell 2.4 percent to $14.39 and United Continental Holdings (UAL.N) was off 0.1 percent at $29.27.

S&P 500 earnings are expected to have risen just 1.6 percent in the first quarter from a year ago, according to Thomson Reuters data, down from a 4.3 percent forecast in January.

Earnings grew 6.3 percent in the fourth-quarter, which was better than a late projection by analysts.

Volume was roughly 6.4 billion shares traded on the New York Stock Exchange, the Nasdaq and the NYSE MKT, compared with the average daily closing volume of about 6.36 billion this year.

Decliners outpaced advancers on the NYSE by about 15 to 14 and on the Nasdaq by roughly 5 to 3.

(Reporting by Caroline Valetkevitch; Editing by Nick Zieminski and Kenneth Barry)

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Analysis: Stock market gains, growth smile on U.S. dollar

March 15, 2013 By Leave a Comment

Analysis: Stock market gains, growth smile on U.S. dollar

() – The stars are aligning for U.S. dollar bulls.

For more than a decade, good times in such markets as stocks and real estate were bad news for the . Investors tended to use the U.S. dollar only as a life jacket when storms raged in risky markets.

Now, though, rather than serving as a , the dollar is benefiting from the ’s surge to and the improvement in U.S. economic data. The dollar nudged down a tad from a seven-month high against a basket of currencies .DXY on Thursday even as the industrial average .DJI surged to another record high despite interest rates remaining at record lows.

For instance, the dollar has gained fairly steadily against the yen. In January, it was trading at 86.67 yen to the dollar; on Thursday it was trading at 96.06 to the dollar. Likewise, the British pound has fallen from 1.62 to 1.51 to the dollar so far this year.

The moves suggests the dollar has entered a multi-year bull cycle, and marks a major shift in its behavior against other asset classes.

“Certainly, all the pieces are slowly coming into place for a bull market for the dollar,” said Paresh Upadhyaya, director of currency at Pioneer Investments in Boston, which had of $204 billion as of the end of last year.

The dollar has outperformed eight out of nine major G-10 currencies so far this year. in Italy has re-ignited fear about the ’s ongoing . Weak economic growth and the prospects of aggressive monetary easing in Japan and Britain have driven the yen and sterling to multi-year lows.

To be sure, there are those who caution that spending cuts from Washington could put a damper on economic growth and the Federal Reserve has pledged to keep interest rates low for the .

Still, capital flows and futures positioning bears out the attitude to U.S. assets.

Cross-border inflows into U.S. stocks are tracking at about $100 billion to $150 billion for 2013, compared with a net neutral level in recent years, according to Nomura Securities. Futures activity shows increased bets on the dollar from speculators.

And stocks are not the only U.S. asset drawing in overseas capital. A recovering commercial property market, where transactions have rebounded by more than four-fold from their post crisis-low in 2009, is also enticing foreign investment.

Purchases of commercial real estate by foreign buyers totaled $24.18 billion in 2012, according to Real Capital Analytics, which tracks the commercial real estate market. That’s up 1.6 percent from the year before and the highest annual total since 2007, a year when the dollar index fell 8.4 percent.

Another undercurrent is the shrinking U.S. current account deficit, the difference between what the U.S. imports and what it exports in goods and services and money transfers, and a measure of how much the United States relies on foreign lenders to fund its economic growth.

The gap, a major headwind for the dollar, narrowed to $110.4 billion in the fourth quarter, or 2.8 percent of gross domestic product, down from a peak of 6.5 percent of GDP in 2005. Analysts expect the shortfall to hit around 2.5 percent this year and next.

For Stephen Jen, a managing partner at London-based hedge fund SLJ Macro Partners, the move confirms a long-held theory that the dollar outperforms when the United States either leads the world into a deep recession or a sustained recovery.

The theory, which Jen developed with economist Fatih Yilmaz when both were at Morgan Stanley, is called “the dollar smile,” because it creates a U-shaped line on a graph when charted against the relative U.S. growth rate. The dollar would hit the trough of the smile when the global economy is highly coupled and there’s little difference in growth between economies.

“The dollar seems to have started to smile again, after being debased by the Fed in the past years,” said Jen, who believes the currency is undervalued and “has the potential to stage a broad-based rally against a wide range of currencies.”

LIABILITY NO MORE

Strong appetite for U.S. assets from overseas investors has driven the rally in the dollar and stocks in 2013. Foreigners have poured money into U.S. equities in recent months while U.S. demand for foreign assets has waned, in part due to the improved outlook for the U.S. economy.

The 25-day correlation between the U.S. dollar index and the S&P 500 stood at 0.53 on Thursday, so the two indicators are moving in tandem more frequently. In late 2012, the correlation was -0.9, almost a perfect inverse relationship.

Net inflows into U.S. equities surged in the second half of 2013. The four-month moving average of net equity inflows rose to $17 billion at the end of 2012, highest since January 2008, according to Nomura Securities.

Jens Nordvig, global head of currency strategy at Nomura Securities in New York, said the shift in cross-border flows in favor of U.S. equities is notable because it is not a response to risk aversion.

“The underlying trend is starting to be U.S. dollar bullish on the private flow side,” he said. “In the past, this has been important for dollar direction. Hence, one should take note.”

Investors had become accustomed to the dollar as a hiding place, as its last major rally came when the financial crisis raged in 2008 and 2009. But the last two major bull markets for the U.S. dollar – 1995-2000 and 1980-1985 – came at a good time for stocks, said Greg Anderson, North America head of FX strategy at Citigroup in New York.

BETTING ON THE DOLLAR

Speculators boosted bets in favor of the dollar for a third straight week to $23.57 billion in the week ending March 5, data from the Commodity Futures Trading Commission showed. That’s still below a high of nearly $40 billion in June, suggesting positioning is far from extreme levels.

Of course, that’s not to say the dollar won’t wobble a bit in the short-term. Hefty government spending cuts tied to the sequester could dampen economic activity later this year. For all of the fanfare behind recent moves, the dollar index has still not surpassed levels seen in the summer of 2012, and previous rallies were short-lived.

In addition, a major move in the dollar may still be months away until the Federal Reserve sends a clear hint that it intends to taper its bond purchases.

Bilal Hafeez, global head of FX strategy at Deutsche Bank, said the dollar’s surge against the yen makes him think the U.S. currency may be starting a “multi-year uptrend.” Since 1995, the yen has always been the last currency to peak or trough against the dollar, he said.

With Japan ramping up monetary easing, investors may revive the yen “carry trade,” borrowing with Japanese assets to finance purchases of higher-yielding stocks or commodities. The dollar is up 11 percent against the yen this year and has gained nearly 30 percent from a record low of 75.35 yen set in October 2011.

Ken Dickson, investment director of currencies at Standard Life Investments in Edinburgh, with assets under management of $263.9 billion, said his firm is “very heavily overweight” the dollar, especially against the yen.

“Our positive stance has been maintained for a number of quarters but became more significant in the second half of last year,” he said.

(Additional reporting by Gertrude Chavez-Dreyfuss, Ilaina Jonas and Daniel Bases; Editing by David Gaffen, Dan Burns and Leslie Gevirtz)

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Dow at record again, ends higher for ninth day

March 14, 2013 By Leave a Comment

Dow at record again, ends higher for ninth day

() – Stocks edged up on Wednesday, with the Dow rising for the ninth straight session to another record, buoyed by surprisingly strong retail sales that suggested the economy is .

The average’s nine-day is the longest consecutive run since November 1996.

But trading volume was light. Moves have been muted in recent days as investors consolidate positions after a -up in the first three months of the year. Still, weakness in stocks has been met with buying, which helped propel the market’s advance.

The broader S&P 500 is within of its all-time closing high of 1,565.15 and about 1 percent away from all-time intraday high of 1,576.09 – both set in 2007.

“I think we will soon see the S&P at all-time high levels. I don’t think the market has topped yet, and there is still strength to move the market higher,” said Ari Wald, at C&Co/PrinceRidge in New York.

“Will we see a correction of 10 percent or so soon? Not imminently. We have not seen a divergence of behavior yet where participants become more selective on which stocks to buy.”

International Business Machine (IBM.N) and Boeing Co (BA.N) were the Dow’s top two gainers. IBM shot up 0.7 percent to $212.06. Boeing also jumped 0.7 percent – to $84.75 at the close.

The Dow Jones industrial average .DJI gained 5.22 points, or 0.04 percent, to 14,455.28, another record closing high. The Standard & Poor’s 500 Index . advanced 2.04 points, or 0.13 percent, to 1,554.52. The Nasdaq Composite Index . gained 2.80 points, or 0.09 percent, to end at 3,245.12.

Signs of strength in the economy and the Federal Reserve’s easy monetary policy have helped U.S. equities accelerate their advance. The blue-chip Dow is up 10.3 percent for the year and the benchmark S&P 500 index has gained 9 percent.

Wednesday’s retail sales report reinforced the view that the U.S. economy has momentum, even with the obstacles the recovery is facing. Sales increased 1.1 percent in February, the largest increase since September.

Investors had been looking for signs of any impact on spending from stubbornly high unemployment and a higher that went into effect at the start of the year.

The Morgan Stanley retail index .MVR gained 0.7 percent.

Coach (COH.N) shares rose 1.8 percent to $49.67 after Citigroup raised its rating on the luxury leather goods company’s stock to “buy” from “neutral.

Walgreen (WAG.N) jumped 4.2 percent to $42.78 after UBS raised its rating to a “buy” from “neutral”, and lifted its price target to $48 from $41 on the stock of the largest U.S. drugstore chain.

But Express Inc (EXPR.N) shares slid 3.2 percent to $18.25 after the apparel retailer posted fourth- and said it was off to a slow start in the first quarter.

Spectrum Pharmaceuticals (SPPI.O) shares lost 37.3 percent to $7.79 after the biotechnology company forecast full-year sales well below analysts’ estimates.

Volume was below average, with roughly 5.5 billion shares trading on the New York Stock Exchange, the Nasdaq and the NYSE MKT, compared with the 2012 average daily closing volume of about 6.45 billion.

Advancers outnumbered decliners on the New York Stock Exchange by a ratio of 17 to 13. On the Nasdaq, the positive breadth was slightly wider, with about seven stocks rising for every five that fell.

(Editing by Jan Paschal)

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Business: Bullish retail sales bolster economic outlook

March 14, 2013 By Leave a Comment

Business: Bullish retail sales bolster economic outlook

() – expanded at their fastest clip in five months in February, the latest sign of momentum for an economy facing from higher taxes and pricier gasoline.

The solid sales came on the heels of strong gains in employment and manufacturing. But the improvement in the economic picture is likely insufficient to compel the Federal Reserve to reduce its support.

“Consumers have been less fazed by the increase in taxes than we expected,” said Gus Faucher, a senior economist at PNC Financial Services in Pittsburgh. “Because the labor market has been doing a bit better than we were expecting, people are feeling a bit confident and not cutting back their spending.”

Retail sales increased 1.1 percent, the largest rise since September, after a revised 0.2 percent gain in January, the said on Wednesday. That was well above economists’ forecasts for a 0.5 percent advance.

So-called core sales, which strip out automobiles, gasoline and building materials and correspond most closely with the component of the government’s measure of gross domestic product, rose a stronger-than-expected 0.4 percent.

The upbeat report helped extend a stocks rally on Wall Street, with the industrial average . rising for a ninth straight session for the first time since 1996. .N

It also lifted the dollar to a seven-month high against a basket of currencies. Prices of U.S. slipped.

The healthy sales gains came despite the end of a 2 percent payroll and a hike in tax rates for wealthy Americans at the start of the year.

The rally, rising home prices and steady job gains, which are starting to push wages higher, have helped consumers. Households are also cutting back on saving.

The firming economic tone was also underscored on Wednesday by a survey showing U.S. chief executive officers grew more confident in recovery in the first quarter. However, they remained hesitant to step up hiring.

While employment growth quickened last month, economists say the Fed needs to see a sustained stretch of even stronger job growth to step away from its very easy monetary policy stance. The central bank is buying $85 billion in bonds per month and has said it would keep up its asset purchases until it sees a substantial improvement in the labor market outlook.

“The economy in February is looking solid in employment, manufacturing, non-manufacturing activity, and retail sales,” said John Ryding, chief economist at RDQ Economics in New York. “None of this, however, is likely to cause the Fed to change tack in the near term.”

GROWTH FORECASTS RAISED

The gains in core sales in the first two months of the year suggested that consumer spending, which accounts for about 70 percent of the U.S. economy, may only slow a bit from the 2.1 percent annual rate notched in the last three months of 2012.

Economists had expected the increased tax burden and higher gasoline prices to weigh more heavily.

Growth prospects for the first quarter were further bolstered by a second report from the Commerce Department showing business inventories rose by the most in more than 1-1/2 years in January.

Retail inventories excluding autos – which go into the calculation of gross domestic product – recorded their largest increase since August 1995. Inventories had subtracted 1.6 percentage points from fourth-quarter GDP.

The strong pace of inventory accumulation in January and the healthy reading on core retail sales prompted some economists to raise their first-quarter GDP estimates.

JPMorgan analysts bumped their forecast up by eight-tenths of a percentage point to 2.3 percent, while Goldman Sachs raised theirs by three-tenths of a point to 2.9 percent.

The economy grew at a rate of only 0.1 percent in the fourth quarter. A Reuters survey of economists forecast growth averaging 1.8 percent this year, down slightly from 1.9 percent in a poll last month. The latest survey was conducted before Wednesday’s retail sales report.

Part of the rise in retail sales reflected a 35 cents a gallon increase in gasoline prices, which helped lift sales at service stations by 5 percent, the largest gain since August.

But there was also strength in sales at auto dealerships, which rose 1.1 percent.

Excluding autos, retail sales increased 1 percent, the most in five months.

Sales at building materials and garden equipment suppliers increased 1.1 percent, reflecting gains in home building. Sales also rose at clothing and general dealer stores.

Online shopping receipts also moved higher

However, delays in processing tax refunds probably hurt sales at restaurants and bars, and at sporting goods, hobby, book and music stores, which all registered declines. Sales of electronics and appliances also slipped, as did furniture sales.

(Reporting by Lucia Mutikani; Editing by Neil Stempleman, Tim Ahmann and Dan Grebler)

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Business: Dow record not necessarily a buy signal

March 9, 2013 By Leave a Comment

Business: Dow record not necessarily a buy signal

() – The Dow’s run to record highs in the stock market’s rally this year may not mean it’s time for investors to go on a buying spree.

Instead, many are telling clients to go easy, whether they’re just getting back into stocks or seeking to add to equity positions.

Questions over how much higher the market can go have kept caution in play, with some technical indicators suggesting the market is overbought.

But the case for investing in stocks is strong, they said, particularly given signs of more strength in the economy, especially Friday’s jobs report, which showed a much higher-than-expected 236,000 workers added to the payrolls in February.

“We’re telling clients to take a more defensive approach to the market right now,” said Frank , chief executive of Planned Financial Services, an independent in Cleveland.

Yet stocks remain a better choice than other , he said.

“If I had to pick a category, I’d still be looking at equities,” Fantozzi said. “We still think the market is going to post positive gains for the year.”

On Tuesday, the average . broke through levels not seen since 2007 and continued to mark new record highs the . The Dow is now up 9.9 percent since December 31.

The broader Standard & Poor’s 500 .SPX on Friday ended less than 1 percent away from its record close of 1,565.15, which it reached on October 9, 2007. The S&P 500 is up 8.8 percent since the end of 2012.

Valuations remain relatively attractive. The S&P 500′s forward 12-month price-to-earnings ratio, a commonly used measure to value stocks, is at 13.8 percent, still below its historic average P/E of 14.8 percent, based on data going back to 1968, Thomson showed.

CAUTION VS APPETITE

Other experts gave similar advice, saying investors should proceed, but with caution.

“We still have some speed bumps ahead of us,” said Fred Dickson, at D.A. Davidson & Co. in Lake Oswego, Oregon. “We don’t see any urgency to jump in.”

U.S. spending cuts loom as Washington debates the path of fiscal policy, while the euro-zone crisis is far from resolved. U.S. economic growth has also been slow.

Another reason for caution: U.S. earnings growth – one of the biggest drivers of the market – is slowing. Estimates for first-quarter S&P 500 earnings are now at 1.4 percent, down from a 4.3 percent forecast from January 1, Thomson Reuters data showed.

“I try to tell people that although it’s a great run, there will probably be some pullback, and we’ll see it start to taper off into the summer,” said Rodd Newhouse, a Dallas-based financial adviser with Wells Fargo Advisors.

Investor interest in the market is high, analysts have noted.

TD Ameritrade Investor Movement Index, which is designed to measure investor sentiment based on data on positions and trading activity, rose to 5.14 in February from 4.71 in January, and is high relative to historic ranges.

Stock funds attracted $7.14 billion in the week ended March 6, data from EPFR Global showed on Friday, well above the previous week’s cash gains of $1.2 billion. Appetite for U.S. stocks largely accounted for the inflows.

“Every call that I took this week was (clients asking) ‘Why?’ They want to know why this market is trading here … they want to be involved,” said Leslie Ferrone, an Oak Brook, Illinois-based financial adviser affiliated with Concert Wealth Management.

TIME FOR A BREAK?

Some argue it may be time to take a break from buying.

Paul Mendelsohn, chief investment strategist at Windham Financial Services in Charlotte, Vermont, said his computer models show the market is “extended,” including regression slopes and other indicators that look at how far the market has come and how fast.

“The key here is just don’t make a big mistake,” Mendelsohn said.

He said he’s been reducing his exposure to stocks in recent weeks, reversing a more bullish stance.

“I’m going to err on the caution side here.”

Other advice on how to manage the current trend is to shop for bargains while selling stocks with sharp gains.

“We’re still riding the wave, but taking profits in some of the higher flyers that have done really well and buying some of the areas that are down for the year and hitting new lows,” said Alan Lancz, president of Alan B. Lancz & Associates Inc., an investment advisory firm in Toledo, Ohio.

“We’re still finding some bargains,” Lancz said.

Fantozzi said he still expects large-cap growth industries to do well, including manufacturing and technology. But he said he would avoid defense companies because of the potential for government spending cuts in that area.

“If there’s a pullback, we’re not looking at a major pullback,” Fantozzi said.

(Reporting by Caroline Valetkevitch; Additional reporting by Ashley Lau; Editing by Jan Paschal)

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Business: Steady job gains seen bolstering economy

March 8, 2013 By Leave a Comment

Business: Steady job gains seen bolstering economy

() – Job growth likely advanced at a in February, which would suggest the economy has enough momentum to withstand the blow from higher taxes and deep government spending cuts.

Employers are expected to have added 160,000 jobs to their payrolls last month, picking up slightly from January’s 157,000 count, according to a Reuters survey of economists.

While that would only be enough to hold the unemployment rate steady at 7.9 percent, it would be another sign of the economy’s fundamental health, which has already propelled the industrial average .DJI to record highs.

“Even though it doesn’t necessary mean an acceleration in growth momentum, it suggests the economy is able to absorb the fiscal austerity,” said Millan Mulraine, senior economist at TD Securities in New York.

A 2 percent payroll ended and tax rates went up for wealthy Americans on January 1. In addition, $85 billion in that could slice as much as 0.6 percentage point from growth this year started on March 1.

The will release the February on Friday at 8:30 a.m.

While, February’s anticipated pace will be below the 177,000 jobs per month average for the six months through January, there are other hints that the labor market’s tone is improving.

First- for jobless benefits fell significantly in February and a report on Wednesday showed hired more workers than expected that month, which led some economists to brace for an upside surprise on Friday.

A snowstorm that buried the East Coast during the survey week for the report could also have kept some workers at home, temporarily depressing the jobs tally in February.

“We are moving in the right direction, but it’s just frustratingly slow,” said Peter McHenry, an assistant at the College of William and Mary in Williamsburg in Virginia. “We want job growth to be large and robust, and there are still way too many people who are unemployed.”

About 22.7 million Americans are either out of work or underemployed.

FED STILL IN PLAY

With employment falling far short of the roughly 250,000 jobs per month over a sustained period that economists say is needed to significantly reduce unemployment, the report will give the Federal Reserve ammunition to maintain its very accommodative .

The U.S. central bank is buying $85 billion in bonds per month and has said it would keep up asset purchases until it sees a substantial improvement in the labor market outlook, a message that Fed Chairman Ben Bernanke drove home in congressional testimony last week.

Since the 2007-09 recession ended, the economy has struggled to grow above a 2 percent annual pace. In the fourth quarter, output barely expanded.

Details of the February report are expected to show broad-based gains, with construction likely the star. The sector is expected to have added at least 25,000 jobs last month. In January, construction payrolls increased 28,000, for a fourth straight month of double-digit gains.

A decisive turnaround in the housing market and rebuilding on the East Coast after the destruction wrought by Superstorm Sandy in late October is boosting jobs at construction sites.

Manufacturers likely stepped up hiring in February, although the pace is expected to still be well below what was seen early last year because of lackluster domestic demand and cooling growth overseas.

After seven straight months of gains, retail employment probably took a breather in February. Courier and messenger jobs could rebound from the previous month’s drop, but may also have been depressed by the bad weather on the East Coast.

Healthcare and social assistance probably recorded another month of solid job gains. The same is expected for leisure and hospitality.

Government payrolls are likely to have dropped by about 7,000 last month after falling 9,000 in January. Moderating local government layoffs, outside education, should help to blunt the blow from future job losses at federal agencies as Washington tightens its belt.

The sustained steady job gains are lending some stability to wages. Average hourly earnings are projected to have risen 0.2 percent last month after increasing by the same margin in January.

That would be the fourth straight month of gains in hourly earnings. They increased 2.1 percent in the 12 months through January after a similar advance in December.

“Earnings appear to have bottomed last year and are turning higher on account of the improving labor market performance,” said Mulraine.

The length of the average workweek is expected to have held steady at 34.4 hours.

(Reporting by Lucia Mutikani; Editing by Jan Paschal)

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Jobs, factory data point to steady economic growth

February 2, 2013 By Leave a Comment

Jobs, factory data point to steady economic growth

(Reuters) – Employment grew modestly in January and job gains in the previous two months were larger than first reported, a to recent data that suggested a tepid economic recovery had stalled at the end of last year.

Adding to that optimism, separate reports on Friday showed factory activity hit a nine-month high in January as new orders rebounded, while car and truck sales surged and consumer confidence perked.

The reports, which helped propel U.S. to their highest levels in more than five years, contrasted markedly with a earlier in the week that said the economy shrank unexpectedly in the final months of 2012, albeit for what most economists consider fleeting reasons.

“It is clear that the economy has a forward momentum. Most pistons in the economic engine are firing, pointing to sustained economic growth,” said Sung Won Sohn, an at .

Employers added 157,000 jobs last month and 127,000 more jobs were created in November and December than previously reported, the Labor Department said. Revisions performed each January to the prior year’s data showed the labor market was healthier in 2012 than initially thought.

While the unemployment rate rose 0.1 percentage point to 7.9 percent, the closely watched report showed an increase in and solid gains in construction and retail employment.

Separately, the Institute for Supply Management said its index of national factory activity rose to 53.1 last month, the highest level since April, from 50.2 in December. A reading over 50 suggests expansion in the manufacturing sector.

Activity was boosted by a bounce back in orders and inventories, as well as gains in employment. That offered hope manufacturing will continue to support the economy.

The fairly upbeat reports sparked a rally on Wall Street, with the industrial average touching its highest level since mid-October 2007 and the Standard & Poor’s index rising to a five-year high.

The dollar rallied against the Japanese yen, while U.S. Treasury debt prices fell marginally.

OUTPUT CONTRACTION SEEN AS A FLUKE

A third report on Friday showed consumer sentiment on the rise even as households faced up to smaller paychecks as some federal taxes rose on January 1.

The economic growth picture was also brightened by reports showing several automakers, including General Motors Co and Ford Motor Co scored better-than-expected sales in January.

The flurry of upbeat reports followed Wednesday’s surprise contraction in in the fourth quarter, and as a group should ease worries that the United States was at risk for recession.

GDP contracted at a 0.1 percent annual rate in the fourth quarter, largely because of a plunge in defense spending and slowdown in the pace of inventory accumulation.

Superstorm Sandy, which hit the East Coast in late October, also weighed on output, a drag that should lift this quarter and could be replaced by new spending linked to rebuilding projects.

“Underneath the surface, the fourth-quarter economy was really pretty good despite all the defense cuts. I think the private sector is leading the way,” said Jack Ablin, at BMO Private Bank in Chicago.

Still, the pace of job growth is too slow to absorb the roughly 22.7 million Americans who are either unemployed or working part-time while hoping for full-time work.

Economists say employment gains in excess of 250,000 a month over a sustained period are needed to make a significant dent in the jobless rate.

The Federal Reserve on Wednesday left in place a monthly $85 billion bond-buying stimulus plan, saying economic activity had “paused” in recent months.

“The report keeps the Fed clearly in play to continue their easy monetary policy,” said Eric Stein, at Eaton Vance Investment Managers in Boston.

The Labor Department’s annual benchmark revisions, going back to 2008, found the level of employment as of March 2012 was 422,000 higher than previously reported. That helped to push the average job growth for 2012 to 181,000 a month from 153,000 previously.

MODEST JOB GROWTH

Those steady gains, if sustained, could help the economy weather the headwinds of higher taxes and lower government spending. A cut expired on January 1 and automatic spending cuts will kick in March unless Congress acts.

January’s job gains all came in the private sector. Hiring was broad-based, as it was in December, and declines in public sector employment were small.

The goods-producing sector showed a third month of solid gains, and manufacturing employment advanced for a fourth straight month. Construction payrolls increased 28,000, adding to December’s healthy 30,000 gain.

Since hitting a low in January 2011, construction employment has grown by 296,000. Fully one-third of those gains have taken place in the last four months alone.

Though the level of construction jobs remains about 2 million below its peak in 2006, further improvement is expected this year as the housing market recovery gains momentum.

Housing is expected to support the economy this year, taking over the baton from manufacturing, as many Americans buy and start to furnish and renovate houses.

Within the vast private services sector, retail jobs rose by a solid 32,600 jobs after rising 11,200 in December. Retail employment has now risen for seven straight months.

Education and health payrolls added 25,000 jobs in January after employment grew by the most in 10 months in December.

Government payrolls dropped by 9,000 last month after falling 6,000 in December. The pace of cuts is moderating as local government layoffs, outside education, subside.

Average hourly earnings rose four cents last month and were up 2.1 percent in the 12 months through January. That followed a similar gain in December.

“It may be that we are now getting to a point in the labor market where we are going to see an upward creep in average hourly earnings,” said John Ryding, chief economist at RDQ Economics in New York.

“That’s going to be good for the consumer and they need help because they are being whacked by the payrolls tax increase.”

The length of the workweek for the average worker was steady at 34.4 hours for a third straight month.

(Additional reporting by Ellen Freilich, Steven C. Johnson, and Leah Schnurr in New York; Editing by Ros Krasny and Andrea Ricci)

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Business: Bernanke’s “cliff” comments break two-day rally

November 21, 2012 By Leave a Comment

Business: Bernankes cliff comments break two day rally

() – Wall Street halted its two-day rally on Tuesday, after said the central bank lacks tools to cushion the economy from the impact of the “fiscal cliff.”

The day’s biggest disappointment was Hewlett-Packard Co shares (HPQ.N), which sank to a 10-year low after the computer and printer maker swung to a fourth- and announced a $5 billion charge related to “accounting improprieties.” The stock slid 12 percent to close at $11.71.

Bernanke, in comments before the Economic Club of New York, said the Fed does not have the ability to offset the damage that would result if politicians fail to strike a deal to prevent a series of mandatory tax increases and spending cuts scheduled to go into effect early next year.

The statement caused a downdraft in the market, though the equity market cut most of its losses before the end of the day.

“This is a more realistic and pragmatic picture of where we are, compared to what we’ve been hearing for the past couple of days from politicians that are mostly PR stunts,” said James Dailey, at TEAM Asset Strategy Fund in Harrisburg, Pennsylvania.

Stocks had rallied for the last two sessions after Washington politicians sounded an encouraging note that a deal to avoid the U.S. fiscal cliff could be reached. The gains followed two weeks of sharp losses that pushed the S&P 500 down through the 200-day moving average, a key benchmark of the market’s long-term trend.

The S&P ended Tuesday near that level, which was 1,382.68.

The .DJI slipped 7.45 points, or 0.06 percent, to 12,788.51 at the close. But the Standard & Poor’s 500 Index . edged up 0.93 of a point, or 0.07 percent, to finish at 1,387.82. The . inched up 0.61 of a point, or 0.02 percent, to close at 2,916.68.

Dow component HP said it took an $8.8 billion charge in the quarter, with $5 billion related to its acquisition of software firm Autonomy, citing “serious accounting improprieties.” HP’s market value is now just $23 billion, compared with $100 billion just two years ago.

Best Buy Co (BBY.N) shares fell 13 percent to $11.96 after the consumer electronics retailer reported a net loss of $13 million for the third quarter on weaker-than-expected sales at its established stores.

Another factor weighing on stocks was Moody’s Investors Service’s reduction of France’s sovereign rating by one notch to Aa1 after the market’s close on Monday. Moody’s cited an uncertain fiscal outlook as a result of the weakening economy.

“This brings forward a whole new set of problems to the euro -zone issue. When the lifeguards, in this case, Germany and France, are in trouble, when they need to save people like Greece and Spain, that could be a big concern,” Dailey said.

Earlier, data showed U.S. housing starts rose to their highest rate in more than four years in October, suggesting the housing market recovery was picking up momentum, even though permits for future construction fell.

An index of housing-related shares .HGX shot up 2.5 percent.

Volume was roughly 5.6 billion shares on the New York Stock Exchange, the Nasdaq and the NYSE MKT, compared with the year-to-date average daily closing volume of around 6.5 billion.

Advancers outnumbers decliners on the NYSE by a ratio of about 4 to 3. On Nasdaq, the opposite trend took hold, with about 13 stocks falling for every 12 that rose.

(Reporting by Angela Moon; Editing by Jan Paschal)

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Business: Stock index futures signal early losses

September 24, 2012 By Leave a Comment

ef203678a5c262268519e0a7a39c7d83 Business: Stock index futures signal early losses

(Reuters) – Stock index futures pointed to a lower open on Wall Street on Monday, with futures for the S&P 500 down 0.34 percent, down 0.3 percent and Nasdaq 100 futures down 0.18 percent at 5.02 a.m. EDT.

European shares and the euro followed a broad range of riskier assets lower on Monday as investors refocused attention from central bank stimulus schemes to weak economic fundamentals and a new range of risks in the ’s .

German business sentiment dropped for a fifth successive month in September to its lowest level since early 2010, showing even the strongest of Europe’s economies is succumbing to an economic downturn.

sustained a loss of nearly $10 million on Friday due to an “operational error” in handling of stock option trades known as dividend trades by the company’s Merrill Pro unit, the Wall Street Journal reported on Saturday.

Unionized workers at ’s (F.N) Canadian operations have voted in favor of a four-year labor agreement with the company, the union and Ford said on Sunday.

Taiwan’s Foxconn Technology Group closed its Taiyuan plant in northern China on Monday after what the company called a “personal” dispute spiraled into a brawl involving 2,000 workers in a dormitory late on Sunday night, injuring 40. The Taiyuan plant, which employs about 79,000 workers, makes automobile electronic components, consumer electronic components and precision moldings. An employee told Reuters the plant also makes parts and assembles Apple’s (AAPL.O) iPhone 5.

U.S. stocks closed flat on Friday even though investors welcomed Spain’s efforts to seek a bailout and cheered Apple’s newest iPhone that went on sale today, driving its shares to a record high.

The industrial average . slipped 17.46 points, or 0.13 percent, to close at 13,579.47. The Standard & Poor’s 500 Index .SPX dipped just 0.11 of a point, or 0.01 percent, to finish at 1,460.15. The . rose 4.00 points, or 0.13 percent, to close at 3,179.96.

(Reporting by Blaise Robinson; editing by Patrick Graham)

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