Markets higher on steady unemployment rate in February

Stocks leaped at the opening after the favorable jobs report & continued higher. Dow is up 86, advancers over decliners an impressive 4-1 while NAZ was up 25. Bank stocks were in demand again. The Financial Index needs another 10 points to reach a new 2009-10 high. However, its record highs above 500 are still distant.


S&P 500 FINANCIALS INDEX

Value 203.61

Change 2.96

% Change 1.5%

Below is a picture of JPMorgan (JPM), Dow stock, which is considered the quality big bank. The chart for the last 6 months shows it's had tough sledding (mirroring the Financial Index), a time when many industrial stocks have done very well. One easy comparison, the Alerian MLP Index is up 25% during those 6 months.

JP Morgan --- 6 months





The MLP index gained 2 to the 297s. It may want to try & break thru the 300 ceiling again. The Dow Jones REIT Index was also up 2, to 185. It's interim high was 190 in Dec, a goal to shoot for. Junk bond funds were higher on encouraging news about the economy (a strong economy will help solve problems for marginal companies & their borrowings). But Treasuries sank, the yield on the 10-year Treasury bond rose a big 9 basis points to 3.70%.

Alerian MLP Index --- 2 weeks




Dow Jones REIT Index --- 2 weeks









Commodities were strong on hopes that economic recovery will bring higher demand. Oil is clearly above 80 (its former ceiling), making the bulls happy. Gold also gained & is not far off its record highs above 1200.

CLJ10.NYM

...Crude Oil Apr 10

...81.79

... 1.58 .......(2.0%)

Gold

...1,140.00___

6.90___

0.6%

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Photo: Bloomberg


The unemployment rate held at 9.7% in Feb as employers shed only 36K jobs, fewer than expected. The figures suggest the job market is slowly healing but that significant hiring has yet to occur. Without the snow storms last month, the economy might have seen a net jobs gain. But hiring may continue weak for some time. The recession eliminated 8.4M jobs. It takes 100K new jobs per month just to keep up with population growth & keep the unemployment rate from rising. Yesterday the House passed legislation giving companies that hire jobless a temporary payroll tax break but that may not create many jobs.

•Payrolls in U.S. Fall Less Than Economists' Forecasts; Jobless Rate Holds

Unemployment rate - 1 year

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Holding the jobless rate at 9.7% in Feb was overrated in its importance for a US economic recovery. It's similar to a rally when profits are down, but they "beat expectations." The rate remains quite high by any standard & there is no indication that employers are going to add new hires in a meaningful way. Auto sales continue to lumber along at mediocre a rate while housing is in a terrible slump. But Dow & NAZ just broke into the black YTD, encouraging signs for the bulls.

Dow Jones Industrials --- 2 weeks




Nasdaq --- 2 weeks