SPX & NASDAQ both finished 0.7% higher
Stocks catapulted higher right out of the gate today, as investors celebrated the latest round of deal-making and encouraging employment data. More notably, though, Automatic Data Processing (ADP) said the private sector added 201,000 jobs in March -- in line with expectations, and prompting a collective sigh of relief ahead of Friday's closely watched payrolls report.
"This is a strong report that indicates continued momentum in the pace of labor market recovery," wrote an economist in a research note.
As the bullish stars aligned, the Dow Jones Industrial Average approached multi-year highs, with all three major market indexes ending comfortably north of breakeven.
One analyst said what’s known as “window dressing” by portfolio managers, an attempt to improve the appearance of quarterly statements by adding to certain investments, also helped.
QUOTE : Portfolio Fund Manager
“The upside pressure on the market is mainly due to the need to reduce cash before the end of the quarter,”
The S&P 500 Index (SPX – 1,328.26) ended with a gain of 8.8 points, or 0.7%, notching its first finish atop the 1,320 level since March 9. However, the broad-market barometer retreated in the face of the 1,330 level, which has been conquered just once on a daily closing basis since Feb. 18. Finally, the Nasdaq Composite (COMP – 2,776.79) ended with a similar gain of 19.9 points, or 0.7%, but ran into a wall in the 2,780 level. However, the tech-rich COMP is now on pace to end the week atop its 10-week trendline for the first time in almost a month.
Stocks have bounced back markedly from the slump triggered by fears over the situation in Japan, the Middle East and North Africa. Indeed, the Dow has soared 737 points, or 6.4%, since bottoming on March 16.
Dow Jones Industrial Average
The Dow closed higher on Wednesday as it extends the rally off March's low. This morning's jobs report indicated that the US economy added 201,000 jobs to the private sector this month. That added to optimism in the equity markets as it extended the rally off March's low but fell short of testing February's high crossing at 12,391. Investors are still worrying about the long-term implications of Japan's earthquake, tsunami and nuclear crisis, as well as increasing social unrest in the Middle East and rising debt concerns in Europe. Nevertheless, the high-range close sets the stage for a steady to higher opening on Thursday. Stochastics and the RSI are overbought but remain bullish signaling that sideways to higher prices are possible near-term. If the Dow extends the aforementioned rally, February's high crossing at 12,391 is the next upside target. Closes below the 20-day moving average crossing at 12,027 are needed to confirm that a short-term low has been posted.
First resistance is today's high crossing at 12,383.
Second resistance is February's high crossing at 12,391.
First support is the 10-day moving average crossing at 12,101.
Second support is the 20-day moving average crossing at 12,072.