Friday, February 1, 2013

Markets soar on improving jobs data

Dow rose 136 (nearing 14K), advancers ahead of decliners 4-1 & NAZ gained 23.  The Financial Index was up 2+ to the 237s, a new post 2008 high.  The MLP index fell 1+ to the 429s on profit taking & the REIT index rose 1+ to the 279s.  Junk bond funds were higher & Treasuries also were bid up.  Oil changed little but gold is having a good day, negative bets on economic improvement.

AMJ (Alerian MLP Index tracking fund)

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Treasury yields:

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U.S. 2-year


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CLH13.NYM...Crude Oil Mar 13...96.58 ...Down 0.91 (0.9%)

GCG13.CMX...Gold Feb 13.....1,663.80 ...Up 3.20 (0.2%)

<p>               In this Tuesday, Jan. 22, 2013 photo, job seekers fill a room at the job fair in Sunrise, Fla. U.S. employers added 157,000 jobs in January, and hiring was much stronger at the end of 2012 than previously thought, providing reassurance that the job market held steady even as economic growth stalled, according to Labor Department reports, Friday, Feb. 1, 2013. (AP Photo/J Pat Carter)

Photo:   Yahoo

US employers added 157K jobs in Jan, & hiring was much stronger at the end of 2012 than previously thought.  The Labor Dept report showed a jump in hiring in the final 2 months of last year, just when the economy was sputtering & facing the threat of deep gov spending cuts & tax increases from the fiscal cliff. The department revised up the estimated job gains for Nov from 161K to 247K & for Dec from 155K to 196K. But the mostly encouraging jobs report included one negative sign, the unemployment rate rose to 7.9% from 7.8% Dec. The hiring picture over the past 2 years also looked stronger after the annual revisions, showing employers added an average of roughly 180K jobs a month in 2012 & 2011.  That was up from previous estimates of about 150K.  The employment report revealed a notable shift in the job market, more hiring by construction companies. Solid hiring in retail, construction, restaurants & hotels may suggest that such companies expect consumer spending to hold up in coming months.

A shopper walks down an aisle in a newly opened Walmart Neighborhood Market in Chicago in this September 21, 2011 file photo. REUTERS/Jim Young/Files

Photo:   Yahoo

Consumer sentiment unexpectedly improved in Jan as Americans felt the deal to avert the fiscal cliff at the beginning of the year boded well for the economy.  The Thomson Reuters/University of Michigan's final reading on the overall index of consumer sentiment rose to 73.8 from 72.9 in Dec, topping forecasts for 71.5.  It also marked an improvement from early Jan 71.3 preliminary figure, which had been the lowest level in over a year.  Survey interviews were done before data earlier this week showed the economy contracted in the fourth quarter.  "The payroll tax increase has had a significant impact on spending among lower income households," survey director Richard Curtin said.  While the recent negative gross domestic product reading is unlikely to cause a significant downturn among consumers, the spending cuts that are set for next month are "a more plausible candidate," said Curtin.  Consumers were nearly equally split on the economy's prospects in 2013, with 28% expecting it to improve & 24% expecting it to worsen.  The barometer of current economic conditions eased to 85 from 87, while the gauge of consumer expectations climbed to 66.6 from 63.8.

U.S. Michigan Consumer Sentiment Index Rose to 73.8 in January

A view of the Exxon Mobil refinery in Baytown, Texas September 15, 2008. REUTERS/Jessica Rinaldi

Photo:   Yahoo

Exxon Mobil, a Dow stock & Dividend Aristocrat, reported a higher-than-expected 6% increase in quarterly profit on stronger results at its chemical & refining businesses.  EPS was $2.20, compared with $1.97 in the prior year.  Analysts on average expected EPS of $2.00.  Oil & gas output fell 5.2% to 4.29M barrels oil equivalent per day.  Profit at the exploration & production business fell 12% to $7.76B.  But at its chemicals unit, profit more than doubled to $958M, & refining earnings were $1.77B, up sharply from $425M a year earlier.  The stock slid 14¢.

Exxon Mobil (XOM)

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Traders got the news they wanted to hear & bid up stock prices.  Jan was an unusually strong month & Feb extended that rally.  Dark clouds from the lingering fiscal mess in DC are being ignored.  For the time being all news is good news so bulls are on the offense.  Next stop is is Dow reaching a new high, a little over 100 away.

Dow Jones Industrials

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