Posted on July - 07 - 2011
Markets May See A Relief Rally On Jobs Data
– The major U.S. index futures are pointing to a higher opening on Thursday, with sentiment likely supported by data showing some vibrancy in the job market. A survey showed that the private sector added more jobs than had been anticipated, while a government report showed that jobless claims fell more than expected. These reports could serve to remove some of the overhang surrounding the job market and in turn the broader economy.
U.S. stocks showed resilience on Wednesday, as they braved the economic uncertainties and ended modestly higher. After opening lower and falling further in the morning in the aftermath of the release of the results of the Institute for Supply Management’s service sector survey, the major averages recovered by early afternoon trading. Thereafter, the indexes remained mostly above the unchanged line.
The Dow Industrials ended up 56.15 points or 0.45 percent at 12,626 and the Nasdaq Composite closed at 2,834, up 8.25 points or 0.29 percent. Meanwhile, the S&P 500 Index added 1.34 points or 0.10 percent before closing up at 1,339.
Nineteen of the thirty Dow components closed higher, with Caterpillar (CAT), DuPont (DD), IBM (IBM), Intel (INTC), 3M Co. (MMM), Microsoft (MSFT) and United Technologies (UTX) among the biggest advancers. On the other hand, Bank of America (BAC) slid 2.36 percent, while Disney (DIS) and JP Morgan Chase (JPM) lost over 1 percent each.
Among sector indexes, the Dow Jones Transportation Average rose 1.22 percent, the NYSE Arca Disk Drive Index climbed 1.69 percent and the NYSE Arca Gold Bugs Index ended up 1.21 percent.
A hazy economic outlook and the European sovereign debt crisis could stifle any attempt by the markets to make a sustainable uptrend. In the near term, the Dow could be confined to the 11,786-12,729 range. That said, the impending second quarter reporting season may provide some impetus to the markets, given buoyant corporate profit performance.
The Institute for Supply Management’s service sector survey released yesterday showed that its non-manufacturing index fell a worse than expected 1.3 points to 53.3 in June. The business activity index edged down 0.2 points to 53.4 and the new orders index slipped a steeper 3.2 points to 53.6. The order backlogs index fell into the contraction zone, as it slid 6.5 points to 48.5. Meanwhile, the employment index remained almost unchanged at 54.1 in June.
Currency, Commodity Markets
Crude oil futures are rising $1.96 to $98.61 a barrel after moving down $0.24 to $96.65 a barrel on Wednesday. The American Petroleum Institute’s inventory report released late Wednesday showed a 3.2 million barrel drop in crude oil stockpiles in the week ended July 1st.
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