Dow surged 169 to a new record, advancers over decliners 5-2 (relatively muted) & NAZ was up 43. The MLP index rose 2 to the 449s after recent weakness & the REIT index gained 2 to 306, an almost 5 year high. Junk bond funds were higher & Treasuries pulled back after recent strength. Oil rose to
the highest level in a month as US employment increased more
than forecast in Apr, stoking speculation that demand in the
world’s biggest oil-consuming country will increase. Gold fluctuated, as investors assessed the economic data.
Dow Jones Industrials
Photo: Bloomberg
Employment picked up more than forecast in Apr & the jobless rate unexpectedly declined to a 4-year low of 7.5%. Payrolls expanded by 165K workers following a revised 138K increase in Mar that was larger than first estimated, according to the Labor Dept. The forecast projected a 140K gain. Revisions also added a total of 114K jobs to the employment count in Feb & Mar. Private payrolls, which don’t include jobs at gov agencies, increased 176K after a revised gain of 154K the previous month. The jobless rate dropped to the lowest level since Dec 2008, from 7.6% in Mar.
Payrolls in U.S. Rise 165,000 as Unemployment Rate Drops
Photo: Bloomberg
Orders to US factories fell in Mar by the largest drop in 7 months but a key category that signals business investment plans managed a small increase. Factory orders dropped 4% in Mar, reflecting a big plunge in the volatile category of commercial aircraft, the Commerce Dept reported. This followed a 1.9% increases in Feb. Orders in a category considered a proxy for business investment plans rose 0.9%, a modest gain but an improvement from a preliminary report last week that had shown a decline. Weaker economies overseas & the impact of across-the-board gov spending cuts have made businesses more cautious, dampening demand for manufactured goods. But even with the Mar decline, total orders stood at $467B, 43% above the recession low 4 years ago. Demand for durable goods fell 5.8%, after a 4.3% Feb increase. Orders for nondurable goods, were down 2.4% following a 0.1% dip in Feb, partially reflecting falling prices for energy products. The 0.9% rise in core capital goods, the category watched for business investment, followed a 4.8% decline in Feb & a 6.7% surge in Jan. In durable goods, orders for commercial aircraft plunged 48% & demand for autos & auto parts fell edged down 0.4%, a drop expected to be reversed in coming months given recent strong auto sales.
Factory Orders in U.S. Decreased More Than Forecast in March
US service firms expanded at a slower pace in Apr than Mar, restrained by weaker growth in hiring & new orders. The Institute for Supply Management says its index of non-manufacturing activity fell to 53.1 in Apr from 54.4 in Mar (a reading above 50 indicates expansion). The report measures growth in industries that cover 90% of the work force, including retail, construction, health care & financial services. 14 of the 18 industries reported expansion in Apr. But a measure of hiring fell from 53.3 in Mar to 52 last month, indicating fewer jobs were added. This survey conflicted with the gov report that said service-sector hiring improved in Apr when those firms added 185K jobs last month, up from 139K in Mar.
Service Industries in U.S. Expand at Slowest Pace Since July
What is there to say? The bulls are having their way with better than expected employment data. That's attracting buyers from all over. However, many of the new jobs are of the low wage variety. Problems have not vanished. The US recovering is still stumbling & Europe is bogged down in a recession. Dow may not be able to hold 15K at the close if too many bulls leave early to enjoy their profits.
Dow Jones Industrials
Dow Jones Industrials
Treasury yields:
U.S. 3-month |
0.048% | |
U.S. 2-year |
0.214% | |
U.S. 10-year |
1.727% |
| CLM13.NYM | ...Crude Oil Jun 13 | ...94.99 |  ...1.00 | (1.1%) |
| GCK13.CMX | ...Gold May 13 | ....1,469.20 | ...1.50 | (0.1%) |
Photo: Bloomberg
Employment picked up more than forecast in Apr & the jobless rate unexpectedly declined to a 4-year low of 7.5%. Payrolls expanded by 165K workers following a revised 138K increase in Mar that was larger than first estimated, according to the Labor Dept. The forecast projected a 140K gain. Revisions also added a total of 114K jobs to the employment count in Feb & Mar. Private payrolls, which don’t include jobs at gov agencies, increased 176K after a revised gain of 154K the previous month. The jobless rate dropped to the lowest level since Dec 2008, from 7.6% in Mar.
Payrolls in U.S. Rise 165,000 as Unemployment Rate Drops
Photo: Bloomberg
Orders to US factories fell in Mar by the largest drop in 7 months but a key category that signals business investment plans managed a small increase. Factory orders dropped 4% in Mar, reflecting a big plunge in the volatile category of commercial aircraft, the Commerce Dept reported. This followed a 1.9% increases in Feb. Orders in a category considered a proxy for business investment plans rose 0.9%, a modest gain but an improvement from a preliminary report last week that had shown a decline. Weaker economies overseas & the impact of across-the-board gov spending cuts have made businesses more cautious, dampening demand for manufactured goods. But even with the Mar decline, total orders stood at $467B, 43% above the recession low 4 years ago. Demand for durable goods fell 5.8%, after a 4.3% Feb increase. Orders for nondurable goods, were down 2.4% following a 0.1% dip in Feb, partially reflecting falling prices for energy products. The 0.9% rise in core capital goods, the category watched for business investment, followed a 4.8% decline in Feb & a 6.7% surge in Jan. In durable goods, orders for commercial aircraft plunged 48% & demand for autos & auto parts fell edged down 0.4%, a drop expected to be reversed in coming months given recent strong auto sales.
Factory Orders in U.S. Decreased More Than Forecast in March
US service firms expanded at a slower pace in Apr than Mar, restrained by weaker growth in hiring & new orders. The Institute for Supply Management says its index of non-manufacturing activity fell to 53.1 in Apr from 54.4 in Mar (a reading above 50 indicates expansion). The report measures growth in industries that cover 90% of the work force, including retail, construction, health care & financial services. 14 of the 18 industries reported expansion in Apr. But a measure of hiring fell from 53.3 in Mar to 52 last month, indicating fewer jobs were added. This survey conflicted with the gov report that said service-sector hiring improved in Apr when those firms added 185K jobs last month, up from 139K in Mar.
Service Industries in U.S. Expand at Slowest Pace Since July
What is there to say? The bulls are having their way with better than expected employment data. That's attracting buyers from all over. However, many of the new jobs are of the low wage variety. Problems have not vanished. The US recovering is still stumbling & Europe is bogged down in a recession. Dow may not be able to hold 15K at the close if too many bulls leave early to enjoy their profits.
Dow Jones Industrials
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