Dow Jones: 12,376.72 (+56.99) S&P 500: 1,332.41 (+6.58) Nasdaq: 2,789.60 (+8.53): US STOCKS started a traditionally healthy month on strong footing yesterday after solid jobs figures, but the S&P 500 may need help to break to new multiyear highs.
The S&P hovered near 1,333, a significant level as it represents double the 12-year low hit in March 2009. It is close to the 1,344 representing the S&P’s 2011 high, its highest since June 2008.
“There’s a lot of congestion in terms of price action around these levels and I wouldn’t expect the market to break to new highs in the next weeks,” said Paul Zemsky, head of asset allocation at ING in New York.
Strong job growth and supportive comments on Fed policy from influential New York Fed Bank president William Dudley were supportive, but the market is looking to forthcoming earnings to kick the rally into a higher gear.
US employment grew solidly for a second month in March and the jobless rate hit a two-year low of 8.8 per cent.
“Once we get to earnings and get confirmation companies continue to show strength, I think we’ll make new highs on the SP. But a couple of weeks of consolidation seems like a good thing to happen,” Mr Zemsky said.
About 7.4 billion shares traded on the New York Stock Exchange, NYSE Amex and Nasdaq, below last year’s estimated daily average of 8.47 billion. Composite volume was the weakest for any week so far this year.
Caterpillar, the world’s largest construction equipment maker, gained 1.6 per cent to $113.12. General Electric, the world’s biggest maker of power-generation equipment, rose 1.5 per cent to $20.34. Oil conglomerate Chevron gained 0.8 per cent to $108.32.
Oil reached a 30-month high in New York after the unemployment report’s numbers signalled increased demand in the world’s biggest oil-consuming country, and as fighting intensified in Libya. Crude for May delivery rose $1.22 to $107.94 a barrel on the New York Mercantile Exchange, the highest settlement since September 25th, 2008.
F5 Networks slipped 8.8 per cent to $93.56 for the biggest decline in the SP.
The maker of software to handle internet traffic and content may cut its earnings forecast for the current quarter by as much as 5 percent. – (Reuters/Bloomberg)
