Wall Street Rebounds on Employment Data, Greek Hopes

Bikram Pandey
07 Mar, 2012
New York City

U.S. indexes gained after private sector increased payrolls at a higher pace in February and productivity gained at a slower pace in the last quarter. Stocks gained despite the weakening global economic scenario. Crude oil, copper, gold and silver closed higher.

[R]4:15 PM New York – U.S. indexes gained after private sector increased payrolls at a higher pace in February and productivity gained at a slower pace in the last quarter. Stocks gained despite the weakening global economic scenario. Crude oil, copper, gold and silver closed higher.[/R]

The U.S. indexes gained after employment in the private sector rose in February and productivity increased 0.9% in the fourth quarter. Private employers added 216,000 workers to payrolls in the month after adding 173,000 in January, according to a private survey.

Stock indexes rebounded in New York after the release of private employment data in the morning however global economic scenario is weakening after Brazil barely missed a recession in the last quarter and China and India lowered economic outlook and the euro zone and Australia reported weaker than expected growths.

In corporate news, Scotiabank agreed to acquire Howard Weil and Nuance Communications agreed to purchase Transcend for $300 million.

American Eagle Outfitters increased after it estimated margin improvements and Ciena Corp estimated higher than expected second quarter revenues and home builder Hovnanian Enterprises reported narrower loss. Wynn Resorts Ltd was in focus after it asked shareholders the removal of Japanese billionaire Kazuo Okada as a director and the recently listed Pandora Media Inc plunged 25% after its quarterly loss widened.

European indexes edged higher after Germany sold €3.312 billion of 5-year debt at lower borrowing costs and investors were jittery ahead of the Greek debt swap deadline tomorrow. A day before the deadline, about 58% of private investors are ready to participate in the swap.

German orders declined and industrial production was mixed in the euro area in January. Swiss jobless rate remained flat and Sweden recorded a budget surplus in February. The National Bank of Poland held key lending rate.

The UK indexes pared losses of yesterday after better-than-estimated job data in the U.S. The UK shop price inflation eased to a two-year low but permanent job placements rose in February. HSBC agreed to sell its general insurance businesses to AXA and QBE.

Stocks in Tokyo eased for the third day in a row and trimmed the gain in the benchmark index in the year so far to 13.3%. The index fell nearly 2% in the last three sessions. Infrastructure developers extended rally for the second day. The yen strengthened but hovered near a 9-month high.

The benchmark index in Australia declined the most in the year so far and registered the worst one day loss in nine weeks after economic growth in the final quarter was less than expected. The Australian dollar fell against all major currencies.

Commodities, Bonds and Currencies

The yield on 10-year U.S. bond edged up to 1.98% and 30-year bond edged higher to 3.12%.

The U.S. dollar traded down 0.3% to $1.315 to one euro and edged up against the Japanese yen at 81.19.

Immediate delivery futures of Texas crude oil increased $1.68 to $106.38 a barrel and Brent crude rose $2.43 to $124.39.

Futures of natural gas fell 5 cents to $2.31 per mbtu and gasoline price increased 5.3 cents to 328.80 cents a gallon in New York trading.

In metals trading, copper increased 3.50 cents to $3.77 per pound, gold increased $13.50 to $1,685.60 per ounce and silver increased 69 cents to $33.42.