Wednesday, March 30, 2011

Markets rise on job growth

Dow shot up 74, advancers ahead of decliners 3-1 & NAZ added 12, all on the favorable jobs report. After lagging the stock market in Mar, bank stocks are having a good day.

S&P 500 FINANCIALS INDEX

Value	222.17
Change	2.10 (1.0%)

The MLP index was up 2+ to the 377s (7 short of a new record) & the REIT index add 1+ to the 233s. Junk bond funds were higher (near multi year highs) & Treasuries were a little higher. But yields are still near 2 week highs. Oil declined after an industry report showed that US inventories increased the most in 5 months. Gold gained for the first time in 5 days as fighting in Libya & concern about European debt spurred demand for an alternative investment.

JPMorgan Chase Capital XVI (AMJ)

BONDS

U.S. 3-month		0.10%
U.S. 2-year		0.80%
U.S. 10-year		3.47%

CLK11.NYM

...Crude Oil May 11

...104.15

....

0.64

(0.6%)

GCJ11.CMX

....Gold Apr 11

.........1,425.50

...

9.30

(0.7%)

Photo: Yahoo

Private employers added 201K jobs in Mar, while the figure for Feb was revised down slightly (largely in line with expectations) according to ADP Employer Services. The Feb figure was revised down to 208K from 217K. The ADP figures come ahead of the more comprehensive jobs report on Fri, which includes both public & private sector employment. That report is expected to show the economy created about 190K jobs in Mar, while private payrolls are forecast to rise by 200K. However, the ADP report is not always accurate in predicting the outcome. Over the previous 6 reports, ADP’s initial figures were closest to the Labor Dept’s first estimate in Feb (when it understated the gain in jobs by 5K) & least accurate in Dec (when it overestimated the employment gain by 184K).

ADP Estimates U.S. Companies Added 201,000 Jobs in March

Family Dollar Stores (FDO), a Dividend Aristocrat, said fiscal Q2 net income rose 10%, helped by a better flow of customers & a modest improvement in the value of the average transaction. FDO also narrowed its full-year earnings forecast & expects higher earnings than expected. EPS was 98¢ for the period ended Feb 26, up from 81¢ a year earlier & beat expectations of 96¢. Revenue increased 8% to $2.26B, with the strongest results in the consumable & seasonal categories. Revenue at stores open at least a year rose 5.1%. Full year EPS is guided at $3.13-3.23, above the previous range of $3.08-3.23 per share, & revenue is expected to increase 8-10% Analysts expect EPS of $3.12. FDO plans to open 300 new stores in FY2011, a 50% increase over the number of new store openings in FY2010 & plans to renovate 600-800 stores. The stock gained 40¢ to 52.80.

Family Dollar 2Q net income up on better traffic AP

Family Dollar Stores, Inc. (FDO)

Japanese stocks rose, sending the Nikkei 225 to its highest close since Mar 11, as companies resumed production halted after the earthquake & tsunami. Asian stocks rallied. Markets want to close out Q1 on a strong note. Dow is just 40 below the Feb 18 high & the MLP index will not need a lot of buying to reach another record high. We're back to all news is good or at least "good enough." Earnings for Q1 are around the corner.