Rally fades despite welcome jobs report

The Dow gains 57 in a rally fueled by news of lower unemployment and 216,000 jobs created in March. But weakness in Apple weighs on stocks. Automakers -- except Toyota -- report strong March sales. A takeover fight erupts over the NYSE.

By Charley Blaine Apr 1, 2011 1:14PM
Charley BlaineUpdated: 6:15 p. m. ET, Saturday

Stocks took off in the morning after a strong jobs report and appeared poised to end at nearly their best levels of the year. But a sell-off in technology stocks sapped the market's strength in in the last 90 minutes of trading.

The Dow Jones industrials ($INDU were briefly up as many as 100 points at noon ET. A slow fade turned nearly into a rout starting around 2:30 p.m., although the market stabilized with a gain.  The causes seemed to be profit-taking, concern about possible delays for Apple's (AAPL) iPhone 5 and even a rumor that CEO Steve Jobs had passed away. Apple was off 1.1% to $344.56.

The Dow closed up 57 points to 12,377. That's 14 points below its post-2008-crash high of 12,391, set on Feb. 18. The Standard & Poor's 500 Index ($INX) added 7 points to 1,332, and the Nasdaq Composite Index ($COMPX) was up 9 points to 2,790 after briefly going negative. Today is the first day of the second quarter.

The rally was started by the Labor Department's report that unemployment fell to 8.8% in March and payroll employment increased by 216,000.

By most measures, the jobs report offered investors and the White House a lot to cheer about. Private-sector employment was up 230,000. Manufacturing added 17,000 jobs. There was strength in business services, health care and bars and restaurants.

Article continues below.

The market rally got additional boosts from a decent report on manufacturing from the Institute for Supply Management Crude, strong March sales from Ford Motor (F) and General Motors (GM) and a new bid for NYSE Euronext (NYX), the parent of the New York Stock Exchange.

Ford sales jumped 19% from a year ago; GM sales were up 10%. Ford shares rose 1.7% to $15.16, while GM added 4.5% to $32.41.

In addition, New York Federal Reserve Bank President William Dudley told reporters in San Juan, Puerto Rico, that it would be a "surprise" if the Federal Reserve did not complete its $600 billion in bond purchases, though the benefits of doing more have fallen.

Crude oil moves higher, gold falls back
Crude oil continued to rise, settling at $107.94 a barrel in New York, up $1.22 or 3.5%. Brent crude was up $1.52 to $118.88 a barrel.

But gold settled down $11 to $1,428.90 an ounce after hitting a new closing high on Thursday. For the week, gold was up 0.2%.

The dollar was higher against major currencies. So were interest rates, with the 10-year Treasury yield hitting 3.451%, off slightly from Thursday's 3.454%.


Energy prices -- New York close
 
 Fri.  Thur.  Month chg.  YTD chg.
Crude oil 

$107.94  $104.27  1.14%  18.12%
(per barrel)

 

 

 

 
Heating oil

$3.1345  $3.1125  1.45%  23.23%
(per gallon)

 

 

 

 
Natural gas 

$4.3620  $4.3890  -0.62%  -0.98%
(per mil. BTU)

 

 

 

 
Unleaded gasoline

$3.1513

$3.1077

-0.62%

-0.98%
(per gallon)

 

 

 

 
Brent crude

$118.70  $117.36  1.31%  25.28%
(per barrel)











Retail gasoline

$3.6190

$3.6060

0.36%

17.81%
(per gallon; AAA)












'Serious progress' on jobs
"The U.S. labor market is finally making some serious progress," said Sal Guatieri, economist at BMO Capital Markets Economics.

The unemployment rate has fallen a full percentage point over the past four months, the sharpest drop since 1983.


Economists predict employers will add jobs at roughly the same pace for the rest of this year. That would generate about 2.5 million new positions. Still, that would make up for only a small portion of the 7.5 million jobs wiped out during the recession.


There were some issues in the report. Hours worked were flat, and private wages were lower.

Meanwhile, the Insititute for Supply Management reported that manufacturing activity cooled slightly last month after expanding in February at the fastest pace in nearly seven years. But the sector grew for the 20th straight month, another positive sign for the economy.

If there was an issue, it was that purchasing managers are seeing higher prices.

Nasdaq and ICE bid for the NYSE
Nasdaq OMX Group (NADQ) and IntercontinentalExchange (ICE) outlined an $11.3 billion plan to reshape the global exchange sector by carving up NYSE Euronext with an unsolicited offer that tops the terms of the Big Board operator's agreed-upon deal with Germany's Deutsche Boerse.

NYSE Euronext shares were up 12.6% to $39.60.

The $42.50-a-share cash-and-stock offer, announced early Friday, would see Nasdaq OMX expand its franchise in U.S. and European stock and options trading, if it can clear regulatory hurdles. It would also turn Atlanta-based ICE into the world's fourth-largest derivatives exchange by volume; it is currently ranked 14th, The Wall Street Journal said.

Under the Nasdaq-ICE offer, NYSE Euronext shareholders would get $14.24 in cash, plus 0.4069 share of Nasdaq and 0.1436 share of ICE in exchange for each of their shares.


The move presents U.S. lawmakers and regulators with a dilemma, Reuters noted -- whether to allow a German exchange to take control of the venerable New York Stock Exchange, or to allow the creation of a dominant American-run platform with massive market power.


NYSE management said they would consider the offer. Don't expect a decision for a while. Regulators will scrutinize it carefully because it has big-time antitrust issues.


Short hits from the markets -- New York close
 
 Fri.  Thur.

Month chg.

YTD chg.
Treasury yields




 





13-week Treasury bill

0.060%

0.090%

-33.33%

-50.00%
5-year Treasury note 

2.248%

2.225%

1.03%

11.51%
10-year Treasury note

3.333%

3.454%

-3.50%

0.85%
30-year Treasury bond

4.489%

4.508%

-0.42%

2.91%
Currencies











U.S. Dollar Index

76.083

76.072

0.01%

-4.04%
British pound

$1.6119

$1.6046

0.52%

3.29%
(in U.S. $)











U.S. $ in pounds

£0.620

£0.623

-0.51%

-3.18%
Euro in dollars

$1.423

$1.418

0.44%

6.38%
(in U.S. $)











U.S. $ in euros

€ 0.703

€ 0.705

-0.44%

-5.99%
U.S. $ in yen 

84.246

83.170

1.10%

3.54%
U.S. $ in Chinese

6.572

6.545

0.01%

-0.65%
yuan











Canada dollar

$1.038

$1.032

0.66%

3.45%
(in U.S. $)











U.S. dollar 

$0.964

$0.969

-0.66%

-3.33%
(in Canadian $)











Commodities

 

 

 

 
Gold

$1,428.90

$1,439.90

-0.76%

0.53%
(per troy ounce)

 

 





Copper

$4.259

$4.308

-1.14%

-4.24%
(per pound)











Silver

$37.732

$37.888

-0.41%

21.96%
(per troy ounce)











Wheat 

$7.5950

$7.6325

-0.49%

-4.38%
(per bushel)











Corn

$7.3600

$6.9325

6.17%

18.23%
(per bushel)











Cotton 

$1.9555  $2.0023  -2.34%  35.04%
(per pound)











Crude oil 

$107.94

$104.27

1.14%

18.12%
(per barrel)











51Comments
Apr 1, 2011 2:00PM
avatar

In two sentences I can give you a reason to see things fall into the abyss.

1.  Consumer spending accounts for 60 to 70 percent of the economy

2.  If fuel prices remain high or top $4 @gallon a lot of descretionary spending power will be wiped out.

The so called "experts" didn't see it coming in 2008, my take is they still can't see the forrest through the trees.  Real estate is still falling, the bottom is not here yet.  Many jobs now are filled at 1/2 previous wages.  Mix the ingredients and you still can't bake a good tasteing cake. 

Apr 1, 2011 3:35PM
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It used to be be that oil prices were determined by simple fundamentals like, " Supply and Demand." Now that has been thrown out the door and price is determined by trader and speculator manipulation. If this goes on, we will find ourselves in the same mess that we were in in 2008. These people need to be dealt with. The writing is on the wall, you must be blind if you cannot see it.
Apr 1, 2011 3:09PM
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For just once...I want to see the truth to the reported job numbers.  For example..How are these numbers obtained and how valid are they?  Are these full-time or part-time jobs?  Are the jobs based here in America or in some other country?  What is the average hourly rate or salary for the jobs?   We are so desperate for any good news we accept it for face value without understanding the truth and details.   

 

   

Apr 1, 2011 3:56PM
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For February, Gallup disclosed that the real unemployment rate is 10.2%....using DOL's own data. So who should I believe....?? Gallup or the Bureau of Managed Statistics ??

Apr 1, 2011 3:52PM
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I agree somewhat with Mr. Krause, however, I am currently unemployed since July of 2010 as the company I was working for was failing and I was permanently laid off.  Since that time I have been applying as much as I can, had my resume checked multiple times for quality, and cannot tell you how sick I am of seeing the "thanks but no thanks" letters.  Being told am over qualified for the position I am applying for, then almost same quality job being told I don't meet minimum qualifications.  Hell, I just want to work!

I am volunteering much of my time right now running a volunteer EMS service and taking ems call over 100 hours per week, doing extra work for the local fire department for a little extra pay, just trying to supplement the little bit of unemployment I get to survive.  I realize there are many that take advantage of the system, however, there are others, such as myself that are being overlooked.  Human Resources people need job security, so they hire people without looking past their monitor screens, seeing a piece of paper that says they have the education background they require/recommend, only to find out they are brain dead, have to let them go and repeat the hiring (correct spelling by the way) process again. 

Taking the correct route of eager experienced people, willing to work will improve productivity and quality, which spells success for the company, which in turn allows for company profits and growth and more hiring.

 

Apr 1, 2011 2:57PM
avatar
There might not alot of jobs paying 80k a year or 110k a year or heck 40k a year but there are 100's of thousands of jobs out there right now
 In little ol st petersburg downtown area theres at the least 100 businesses highering people for service jobs, 8 or 9 an hour jobs. Banks are highering right now.

 How about these apples, get off your **** TAKE THE JOBS YOU CAN GET and quit feeding of the nipple of welfar and unemployment.

Everyone wants to act like no ones highering guess what your not going to be able to hop right into a coperate management position.

Go back to school get into nursing and health care, theres over 2300 health care jobs in my area
CVS, walgreens, walmart, and target are highering like mad right now due to exspansion

So lets all be big kids now wipe are butts and put on our sundays finest and get those jobs, work that till you get a certifacation or find something better, otherwise your just another leech making up excusses.

This coming from a full time college student who works two full time jobs sleeps on a bunk bed in a studio apartment with 2 roommates!
Apr 1, 2011 1:53PM
avatar

More LIES from the Government and Banksters.... MANIPULATED numbers, the job rate hasn't imporved in this country ONE DAMN BIT !!!!

 

God I hope people are really paying attention instead of listening to this PAID MEDIA trash..Tongue out

Apr 1, 2011 4:40PM
avatar

Given that the Obama Administration and Fed say there is no inflation...  Why should wages be increasing? 

 

Are workers being greedy demanding more money for the exact same work?  

 

Sorry, but Mr. Obama lives in a dreamland.  Visit the grocery store, gas station, or any other place.  Inflation is rampant.   That is why gold, silver, platinum, cotton, cocco, corn, wheat, soy beans, cattle and every other commodity you can think of are at all time record highs.

 

Real inflation is probably in excess of 8%...

Apr 1, 2011 2:17PM
avatar
WOW!! What a crock! In my neck of the woods there are NO JOBS!!! I've been unemployed for over a year. WHERE ARE THESE SO CALLED JOBS??!! I need one nowSmileBaring teeth
Apr 1, 2011 2:59PM
avatar
In just one single sentence, tell me why you feel market will crash this summer.  I don't need a lesson in economics, statistics or the usual economic theories we read about every day.-execo

            

 Printing money out of thin air has never, ever, worked. It's in the history books. This new idea, promoted by the Wall Street Mafia Cartel and enacted by the White House,of going further into debt to get out of debt by printing money (which devalues the currency) is completely and totally absurd. In the past these crooks would have been charged with the deliberate and systematic destruction of a sovereign nation and executed.

              

Apr 1, 2011 1:49PM
avatar

dunnunder.....

 

In just one single sentence, tell me why you feel market will crash this summer.  I don't need a lesson in economics, statistics or the usual economic theories we read about every day.

Apr 1, 2011 3:11PM
avatar
There might not alot of jobs paying 80k a year or 110k a year or heck 40k a year but there are 100's of thousands of jobs out there right now 
 In little ol st petersburg downtown area theres at the least 100 businesses highering people for service jobs, 8 or 9 an hour jobs. Banks are highering right now. 

 How about these apples, get off your **** TAKE THE JOBS YOU CAN GET and quit feeding of the nipple of welfar and unemployment.

Everyone wants to act like no ones highering guess what your not going to be able to hop right into a coperate management position.

Go back to school get into nursing and health care, theres over 2300 health care jobs in my area
CVS, walgreens, walmart, and target are highering like mad right now due to exspansion 

So lets all be big kids now wipe are butts and put on our sundays finest and get those jobs, work that till you get a certifacation or find something better, otherwise your just another leech making up excusses.

This coming from a full time college student who works two full time jobs sleeps on a bunk bed in a studio apartment with 2 roommates!
Thank you i was just about to say that but in a kinder way i guess.
I understand people think they cant find jobs but think about this, where do they live?
Thats part of the problem it honestly just depends on where you live. I live where we see slight growth in jobs at least in lower paying 40k jobs like you have pointed out.  And i understand that people have a hard time not necessarily meaning their lazy but just there area is not seeing "growth". Im 19 years old so i dont have alot of say in this but at least i understand that much........every city is not going to see job growth quickly thats just hopefull thinking. 
Apr 1, 2011 3:56PM
avatar
A day the market should have been up triple digits easily is ending struggling to stay in the green...Unreal...Why? Simple, manipulators doing their thing, cheating and stealing and trying to bring us down as much as possible...That's how these scumbags make their money, by cheating and stealing. And the SEC? The most inept organization in the world has no clue and opts as usual to sit with their thumbs up their behinds and do nothing...Remember Madoff? We have 10 minutes to try to keep things decent...So sad.
Apr 1, 2011 3:57PM
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Awww.....now it "fades". Making news out of no news. The market is what it is.
Apr 1, 2011 5:08PM
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Did unemployment fall or did the number of new claims fall? Where did 216,000 jobs come from? Harvest season ~ more illegal Mexicans? Let's get real already. BTW after reading a few other posts, I'd like to point out that there is a "spell checker" available. Sloppiness and/ or apathy is one of the major reasons we're in the mess we are.
Apr 1, 2011 4:37PM
avatar
I love how these jokers jump the gun in the morning with an article about stocks surging only to look like idiots at the end of the day. Duh loosing!
Apr 1, 2011 5:33PM
avatar

When the unemployment rate drops does that mean more jobshave been opened and are now working. or are more people are running out of their checks? 

 

   I wonder what the real numbers are.  I'll bet the unemployment rate is really about 15% or more if you count all the people who have lost their unemployment benifits and are still unemployeed. 

 Food for thought.

Apr 1, 2011 4:48PM
avatar

countrygirl60: To answer your qusetion, that work force you are talking about is the American "Working Class", or some may call the "Middle Class". I think that may answer some of the other questions in here about why there are more moving into the "Rich and Poor" classes, and and the Middle class is dwindling fast...

 

MirageGuy: BINGO!! Hit the nail on its FACE!

Apr 1, 2011 3:22PM
avatar
Hey Mike K......Good for you! A few more people like yourself and the unemployment rate would be cut in half. Keep up that work ethic it will take you far my friend. Have a great day.
Apr 1, 2011 2:17PM
avatar

comsense

 

Your reasons are valid but have been in existence for past two years without causing a crash. What has changed to make a crash imminent ?

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