Tags: stocks | market | NFP | payrolls

Stocks Advance Amid Economic Data Before Labor Report

Thursday, 02 April 2015 04:17 PM

U.S. stocks rose, after equities’ two-day decline, as a trend of mixed economic data continued before Friday’s government report on hiring.

CarMax Inc. rallied to an all-time high after a stronger-than-estimated fourth-quarter profit. Lorillard Inc. and Reynolds American Inc. climbed as antitrust officials weigh the cigarette companies’ merger. Qualcomm Inc. and Google Inc. slipped more than 1.3 percent.

The Standard & Poor’s 500 Index added 0.4 percent to 2,066.96 at 4 p.m. in New York, and finished the week higher by 0.3 percent. The Dow Jones Industrial Average climbed 65.06 points, or 0.4 percent, to 17,763.24, and the Nasdaq Composite Index rose 0.1 percent. About 5.9 billion shares changed hands on U.S. exchanges today, 15 percent below the three-month average.

“We probably got a bit too sold off as people read into the recent more negative data, and traders are getting back in,” said Bill Schultz, who oversees $1.2 billion as chief investment officer at McQueen, Ball & Associates in Bethlehem, Pennsylvania. “Investors are thinking maybe they shouldn’t leave such a short position out there over the weekend in case the jobs data ends up being better than expected.”

Stocks extended gains after Iran and world powers said they reached an outline accord that keeps them on track to end a decade-long nuclear dispute.

Price Swings

The S&P 500 fluctuated in the holiday-shortened week around a 15-point range framed by the index’s 50-day and 100-day moving averages. Data Thursday showed jobless claims fell more than forecast while factory output topped estimates, continuing a trend of mixed economic reports as the Federal Reserve considers raising interest rates.

Focus is on tomorrow’s monthly payrolls data, in which economists predict nonfarm payrolls rose 245,000 in March, down from February’s 295,000 with no change to the 5.5 percent unemployment rate, the lowest since 2008. Wage growth is also forecast to be little changed.

While markets will be closed, traders will still have 45 minutes to react: The Labor Department will release the report at 8:30 a.m. New York time and index futures will trade until 9:15 a.m.

After the S&P 500’s weakest quarterly performance since the last three months of 2012, investors are now taking steps to protect gains from a six-year bull market as a run of disappointing data and projections for falling profits have reinforced concern that economic growth may be slowing. Bearish options on the S&P 500 outnumber bullish ones by the most since 2008, data compiled by Bloomberg show.

Earnings Reports

Alcoa Inc. unofficially kicks off the earnings season when it releases results on April 8. Analysts estimate first-quarter profits for S&P 500 companies will decline for the first time since 2009. They had predicted earnings growth for the period as recently as January.

Nine of the S&P 500’s 10 main groups gained Thursday, led by consumer and phone companies. The Chicago Board Options Exchange Volatility Index declined 2.9 percent to 14.67. The gauge, know as the VIX, fell 20 percent in the first quarter, the most in a year.

CarMax jumped 9.3 percent to a record after reporting fourth-quarter adjusted earnings that beat analysts’ estimates. Expedia Inc. rose 4.1 percent to a record after Cowen & Co LLC analyst Kevin Kopelman raised his price target to $115 from $90 a share.

Macy’s Inc. advanced 3.7 percent to an all-time high amid a Reuters report that department-store chain Belk Inc. is exploring a sale and may solicit Macy’s interest in a deal.

An S&P index of homebuilders reached its highest level since June 2007. DR Horton Inc., Toll Brothers Inc. and Lennar Corp. rose more than 1.9 percent.

Tech Lags

Media companies gained 1.4 percent, the most of 24 industry groups in the S&P 500. Time Warner Inc. climbed 2.7 percent, rebounding from its worst two-day slide in 10 weeks. Discovery Communications Inc. and CBS Corp. added more than 2.5 percent.

Energy shares pared gains as oil prices fell after negotiators reached an accord in nuclear talks with Iran. Valero Energy Corp., Tesoro Corp. and Marathon Petroleum Corp. slid more than 4.6 percent. Oil lost 1.9 percent after Wednesday posting its biggest gain in two months.

Technology companies lagged as Qualcomm retreated 2.1 percent following its best three-day gain in seven weeks, and Microsoft slipped 1.1 percent. Google Inc. fell 1.3 percent, extending declines to a third day and six out of seven. Shares have slumped 6.1 percent during that period.

Motorola Solutions Inc. tumbled 6.2 percent after people with knowledge of the matter said the company has failed to find a buyer.

United Continental Holdings Inc., American Airlines Group Inc. and Delta Air Lines Inc. lost more than 2.3 percent, pacing declines among a Bloomberg index of U.S. carriers. The group is down 6.9 percent since Monday. The Dow Jones Transportation Average decreased 0.8 percent Thursday to close at its lowest level since October.

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Stocks rose to reverse a two-day decline as a trend of mixed economic data continued before Friday's government report on hiring.
stocks, market, NFP, payrolls
Thursday, 02 April 2015 04:17 PM
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