Posted on April - 04 - 2010
Job Gains May Alleviate Some Of Trader Anxiety – RTTNews Daily Market Analysis
() - The major U.S. index futures are pointing to a higher opening on Monday, with the optimism reflecting hopes that the economy is on the mend. That said, there are underlying fears that if the job gains can become sustainable or the economy could add jobs at a fairly robust pace to help bring down the jobless rate. Traders may also stay tuned to the results of the Institute for Supply Management’s services sector and the pending home sales index for February, both due to be released after the markets open.
U.S. stocks extended their gains to a fifth straight week in the holiday-shortened week ended April 1st on increasing optimism that the economic recovery has taken a firm root. Commodity stocks led the pack of gainers, as they rose in line with the rally in commodity prices after strong growth data points pointed to a pick up in demand.
Last Monday, U.S. consumer spending data propelled the markets higher despite the major averages trading at overbought levels, with positive economic confidence data from Europe also lending support. A lack of conviction among traders concerning the sustainability of the rally led to some selling on Tuesday even after Main Street data confirmed the sustainability of the recovery.
Caution prevailed over optimism on Wednesday, as traders used the results of a private sector employment report revealing another month of job losses as reason for taking profits. The major averages closed the session moderately lower. On Thursday, a string of positive economic readings, including Japanese business confidence, Chinese, European and U.S. manufacturing activity and U.S. jobless claims, gave a positive tone to the markets, although they did see some volatility in the mid-session.
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