Reply #90: closing up the shop for the week

[UpInArms]

Dow 12,609.42 16.61 (0.13%)
Nasdaq 2,370.98 7.68 (0.32%)
S&P 500 1,370.40 1.09 (0.08%)
10-Yr Bond 3.481% 0.11

NYSE Volume 3,703,311,500
Nasdaq Volume 1,994,205,250

On Friday, the stock market closed out a strong week on a dull note, ending the day near the unchanged mark. However, the market showed some resilience by not posting a decline, considering employers cut jobs for the third straight month.

Nonfarm payrolls fell 80,000, which was worse than the 50,000 decline economists expected. This marks the largest decline since 2003. In addition, January’s reading was revised lower to -76,000 from -23,000, and February’s reading was revised lower to -76,000 from -63,000.

Meanwhile, the unemployment rate rebounded to 5.1% from 4.8%. Economists expected a rate of 5.0%.

These numbers are not good, however, the numbers do not necessarily fit the recession label. Unemployment and the decline in payrolls have yet to come close to the early 2000s recession level, which saw unemployment top 6.3% and payrolls fall as much as 325,000.

Seven of the ten sectors finished higher.

Agriculture-chemical company Mosaic (MOS 115.07, +10.55) soared 10.1% on Friday. The company posted the hefty gain after reporting third quarter earnings of $0.99 per share ex-items, which topped the expected earnings estimate of $0.95 per share. As a result, the materials sector (+1.4%) provided leadership and posted a strong 6.6% gain for the week.

The energy sector (+1.0%) also lent some support to the broader market. It rose in conjunction with the 2.3% advance in crude oil prices.

The financial sector (-1.4%) acted as limiting factor to the stock market, with another round of earnings estimate cuts. JPMorgan cut its earnings estimates at Citigroup (C 24.08, -0.28), Bank of America (BAC 39.41, -0.96) and Wachovia (WB 27.21, -1.16). Also weighing on financials was word that Deutsche Bank added JPMorgan Chase (JPM 45.57, -0.71), Citigroup , Sun Trust Banks (STI 56.49, -2.60) and PNC Financial (PNC 67.73, -0.77) to their portfolio as short-term sell ideas. Deutsche cited continued issues related to increasing credit losses, capital markets dislocations, and revenue growth at the banks.

For the week, the S&P gained 4.2%, the Dow advanced 3.2%, and the Nasdaq gained 4.2%.
DJ30 -16.61 NASDAQ +7.68 NQ100 +0.6% R2K +0.3% SP400 +0.1% SP500 +1.09 NASDAQ Dec/Adv/Vol 1392/1465/1.95 bln NYSE Dec/Adv/Vol 1386/1712/1.24 bln

3:30 pm : The major indices slip, with the Dow falling back to the unchanged mark. The S&P 500 and Nasdaq are posting slight gains. The pullback has been broad-based.

The Nasdaq Composite is up 4.7% this week, which means it is set for its best weekly gain in 2.5 years.DJ30 -15.39 NASDAQ +3.91 SP500 +1.16 NASDAQ Dec/Adv/Vol 1438/1411/1.60 bln NYSE Dec/Adv/Vol 1418/1658/949 mln

3:00 pm : The major indices regain some ground. The Nasdaq is outperforming as large-cap tech names continue to show strength.

MBIA (MBI 13.72, -0.57) had its insurer financial strength rating cut to AA from AAA by Fitch Ratings. MBIA's long-term rating was cut to A from AA. MBIA responded by stating it "respectfully disagrees with Fitch's conclusions," citing it has $17 billion in claims-paying resources.DJ30 +31.18 NASDAQ +18.37 SP500 +7.17 NASDAQ Dec/Adv/Vol 1204/1620/1.44 bln NYSE Dec/Adv/Vol 1163/1913/852 mln

2:30 pm : The major indices are drifting lower. The Dow is trading slightly above the unchanged mark, while the S&P 500 is posting a modest gain. Financials (-1.0%) are to blame for the recent slip.

Pimco's Bill Gross said on CNBC that Treasuries are the most overvalued assets in the world. This has not hindered action today, as the 10-year note rallies 29 ticks.DJ30 +4.31 NASDAQ +13.31 SP500 +4.07 NASDAQ Dec/Adv/Vol 1264/1535/1.32 bln NYSE Dec/Adv/Vol 1273/1788/783 mln