Dow erases its loss for 2010 ahead of jobs report
Optimism about the government’s February jobs report sent the Dow Jones industrials back into the black for 2010.
Stocks ended Thursday with a moderate advance after managing only small moves for much of the day. Investors seemed to set aside concerns about the day’s mixed economic reports and focus instead on the Labor Department’s jobs report, due Friday morning.
The monthly snapshot of employment is widely considered to be the most important reading on the economy because a lasting recovery won’t be possible if more jobs aren’t created.
An unexpected drop in pending home sales held the market to a tight range for most of Thursday’s trading. The
The housing numbers chilled some of the enthusiasm about stronger February sales at many retailers. Abercrombie & Fitch Co., Nordstrom Inc. and Target Corp. all posted monthly sales that topped analysts’ expectations.
The Labor Department also said that initial jobless claims dipped last week after two straight weeks of unexpected increases. New claims fell to 469,000, better than the 470,000 economists had forecast.
The weekly numbers provided some encouragement ahead of February’s employment figures. Friday’s report is expected to show that unemployment rose to 9.8 percent from 9.7 percent in January as employers cut 50,000 jobs. But economists also expect slight gains in both average hourly earnings and average hours worked. Increases in these areas often precede a pickup in hiring.
The job market is often one of the last parts of the economy to recovery after a recession. Daniel Penrod, senior industry analyst for the California Credit Union League in Ontario, Calif., said employment gains are needed to stabilize the economy and add to a sense that a recovery is occurring.
“It used to be that confidence led into actual employment where I think the reverse is true now,” he said. “The job market has been so severe nationally that people are really feeling the lumps.”
The Dow rose 47.38, or 0.5 percent, to 10,444.14, its highest close since Jan. 20. The Dow is now up 16 points, or 0.2 percent, for 2010.
The Standard & Poor’s 500 index rose 4.18, or 0.4 percent, to 1,122.97. It is up 0.7 percent for the year.
Three stocks rose for every two that fell on the
Bond prices were mixed. The yield on the benchmark 10-year Treasury note, which moves opposite its price, fell to 3.61 percent from 3.63 percent late Wednesday.
Crude oil fell 66 cents to settle at $80.21 per barrel on the New York Mercantile Exchange.
The dollar mostly rose against other major currencies. Gold fell.
Among retailers, Abercrombie jumped $5.28, or 14.6 percent, to $41.52, while Nordstrom rose 51 cents, or 1.4 percent, to $38.32. Target advanced $1.26, or 2.4 percent, to $52.94.
Bank stocks rose after the Treasury Department took in a record $1.54 billion from the sale of warrants it received from Bank of America Corp. in exchange for support during the financial crisis. Warrants allow the owner to buy a stock in the future at a certain price. The demand for warrants signals that investors expect the stock to go higher. Shares of Bank of America rose 3 cents to $16.40.
The Russell 2000 index of smaller companies rose 3.21, or 0.5 percent, to 652.47.