Thursday, July 7, 2011

Markets rise on favorable employment data

Dow is up 79, advancers ahead of decliners 4-1 & NAZ gained 33. Bank stocks led the way up with the Financial Index at its highest level in more than a month.

S&P 500 Financials Sector Index

Value	210.71
Change	3.17 (1.5%)

MLPs were up again, taking the index to its highest level in over 2 months. The REIT gained 3 to the 252s, highest level in 2011. Junk bond funds were up around 1%, a good day of gains for them. Strong stock markets brought lower Treasury prices with the yield on the 10 year Treasury pushing back to its 3.2% high reached last week. Oil rose to a 3-week high as American companies added more workers than forecast in Jun & on expectations US crude supplies fell. But gold has been marking time in the 1520s.

JPMorgan Chase Capital XVI (AMJ)

Treasury yields:

U.S. 3-month	0.015%
U.S. 2-year	0.470%
U.S. 10-year	3.164%

CLQ11.NYM

...Crude Oil Aug 11

...98.39

....

1.74 (1.8%)

GCN11.CMX

...Gold Jul 11

........1,527.20

...

1.50

(0.1%)

Click below for the latest daily market update:

Photo: Yahoo

New claims for unemployment benefits fell more than expected last week, but distortions associated with the holiday weekend & a gov shutdown in one state made it difficult to get a clear view of the labor market. Initial claims dropped 14K to 418K according to the Labor Dept, slightly better than expectations of 420K. The prior week's figure was revised up to 432K. Data was influenced by the holiday and California & Virginia provided partial estimates. In addition, estimates were made for 4 states & territories. The data also included about 2½K claims from state employees in Minn following the shutdown on Thurs of the state gov. This was the 13th straight week that claims have been above 400K, a level associated with a stable labor market. The 4-week moving average of unemployment claims fell 3K to 424K. The number still receiving benefits under regular state programs dropped 43K to 3.68M & the number on emergency unemployment benefits declined 44K to 3.26M. 7.46M were claiming unemployment benefits, down 61K from the prior week. The data is only moderately encouraging, especially with the totals remaining above the critical 400K level.

Jobless Claims in U.S. Fell 14,000 Last Week

US companies added more workers than forecast in Jun, signaling job growth may pick up in H2, based a report from ADP Employer Services. The 157K increase followed a revised 36K gain in Apr. The median forecast was for only 70K. This is an encouraging signal for tomorrow's big jobs report, but the history of this data as helpful in forecasting has been shaky.

Companies Added a More-Than-Estimated 157,000 Employees in June, ADP Says

Major store chains have been generally reporting favorable Jun sales figures. Meanwhile banks are meeting in Rome to discuss how to proceed in the Greek debt crisis which is not over. There is a fair amount of talk coming from DC about budget cuts & selective tax increases before the debt ceiling is raised, & that clock keeps ticking. Stock markets are not disturbed by global troubles. Dow has recovered & is only 100 below its highs reached in late Apr. The big jobs report tomorrow & start of earnings season on Mon will let us know if optimism in the markets is justified.