ZLBT Chats

Saturday, May 9, 2009

Wall Street extends the rally 09 May 2009

Stocks advance on the day and week after April's job losses are not as bad as expected and stress test results are finally released.
Stocks surged Friday, extending the two-month rally, after a government report showed employers cut fewer jobs than expected last month. The release of the long-awaited bank stress test results also gave the market a boost.
The Dow Jones industrial average gained 165 points, or 2%, ending at the highest point since Jan. 9th. The S&P 500 index rose 22 points or 2.4%, ending at the highest point since Jan. 6. The Nasdaq composite added 23 points, or 1.3%.
The major gauges ended higher for the week as well. The Nasdaq has now ended higher for 9 weeks straight. The Dow and S&P 500 have now ended higher for 8 of the last 9 weeks.

Stocks have been rallying since early March, as investors have bet that the worst for the economy and financial sector has already happened. The S&P has jumped 36% since hitting a more than 12-year low on March 9th.
Although the jobs report was not positive, it could have been worse, said Jim Dunigan, chief investment officer at PNC Wealth Management. That appeared to be sufficient reason to get investors back into the market.
"We seem to be turning a corner here with the pace of the contraction in both employment and the overall economy," he said.
After the close, Warren Buffett's Berkshire Hathaway reported a steep drop in first-quarter profit that beat forecasts on a per-share basis.
Employment report: Employers cut 539,000 jobs from their payrolls in April, the Labor Department reported Friday morning, surprising economists who were looking for job cuts of around 600,000. Employers cut a revised 699,000 jobs from their payrolls in March.

It was the smallest number of job cuts since last October, when the economy lost 380,000 jobs. However, it brings the total numbers of jobs lost to 5.7 million since January 2008. The recession is considered to have started the month before that, in December 2007.
The unemployment rate, generated by a separate survey, rose to 8.9%, as expected, from 8.5% in March, the worst reading since September 1983.
"In absolute terms it was a pretty poor report," said Joshua Shapiro, chief U.S. economist at Maria Fiorini Ramirez Inc.

He said it wasn't as bad as the ones that preceded it, but that it was helped partly by short-term factors such as a big increase in government jobs added to conduct the 2010 census.

"The overall employment picture is still bad, but I think people are looking at leading indicators such as weekly jobless claims, which have been declining," he said. "That could mean a better payrolls report in May."
DJIA NEXT TARGET 8703

No comments:

Post a Comment