Three big blue chips led the market higher yesterday, but it then turned into another lethargic session, dominated by the anticipation of the government’s jobs report due this morning.
Disney (DIS) was spurred on by a favorable report from a Bank of America Merrill Lynch analyst and gained 2.9%. And two other Dow components benefited from opinion changes: Coca-Cola (KO) was upgraded by UBS, gaining 1%, and Boeing (BA) was upgraded and rose 1.7%.
Health care stocks had much of Wednesday’s gain taken back. They were holding their own until a meeting at the White House resulted in a bashing of the industry by the administration. UnitedHealth Group (UNH) fell 3.4%, and Aetna (AET) lost 2%. Cigna (CI) fell 1.9%.
Retailers did well yesterday following the release of February same-store-sales figures. The group gained 1.3%, which was well above expectations.
Jobless claims came in better than expected, up only 1.7%, and non-farm business activity was up 6.9% versus an expected 6.3% increase.
At the close ,the Dow Jones Industrial Average (DJI) gained 47 points to 10,444, the S&P 500 (SPX) rose 4 points to 1,123, and the Nasdaq (NASD) was up 12 points to 2,293.
The NYSE traded just 961 million shares with advancers leading decliners by 3-to-2. The Nasdaq traded 598 million shares with advancers also ahead by 3-to-2.
April crude oil fell 66 cents to $80.21 a barrel, and the Energy Select Sector SPDR (XLE) closed at $57.08, off 30 cents.
Gold for April delivery fell $10.20 an ounce to $1,133.10. The PHLX Gold/Silver Sector Index (XAU) ended the day at 168.03, down 2.25 points.
What the Markets Are Saying
The market continued higher yesterday, again rising with very light volume. This lack of conviction (and the dwelling upon the jobs numbers today) is not the classic formula for success. The market should rise with an increase in volume thanks to the upbeat report, but I’d like to see the market rise on an increase in volume that is not tied to an economic report.
But, along with everyone else, I’m not willing to be the first swimmer in the ocean — even a very slight chance of a shark attack will keep most swimmers out of the water.
One note: Gold pulled back slightly yesterday, but is still strong. The best way to own the metal is to buy stocks that represent ownership in ongoing mining operations. Why? Because stocks have earnings and pay dividends. Bullion and coins do not. And while bullion is costly to buy, own and sell, ETFs are less costly and far more liquid.
Be sure to see the Trade of the Day for my most recent gold pick.
Today’s Trading Landscape
Earnings to be reported before the opening include: Aircastle, Assisted Living Concepts, Cache and Solarfun Power.
Economic reports due: employment situation (the consensus expects -50,000 for non-farm payrolls and 9.8% unemployment rate), and consumer credit (the consensus expects -$4 billion).
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