Stocks at 3 1/2-Year High; Dow Gains 108

[seriousstan]

NEW YORK (AP) -- A surprisingly strong job creation report energized Wall Street Friday, propelling stocks sharply higher as investors grew more confident about the economy and corporate earnings. The Dow Jones industrial average and Standard & Poor's 500 index both reached 3 1/2-year highs on the news.

Wall Street was elated following the Labor Department's report that 262,000 jobs were created in February, far more than the 225,000 economists expected and the most in four months. Jobs were created throughout the economy, from retail to manufacturing.

Investors worried about inflation and higher interest rates found comfort in the report. The nation's unemployment rate ticked up to 5.4 percent, from 5.2 percent in January. And hourly earnings were surprisingly flat, which means workers' paychecks aren't growing and that businesses may have a hard time raising prices.

"It hit the sweet spot," said Jack Caffrey, equities strategist at J.P. Morgan Private Bank. "You got more people getting jobs, that's the important thing, and you have growth in wages, but not enough to raise fears of inflation. And that's really helping the market right now."
http://biz.yahoo.com/ap/050305/wall_street_2.html

[pie]

1. Very funny. Very sad. Dream the dream till the tsunami hits.

[mmonk]

2. We got this little debt problem

which along with high energy prices and the ever increasing trade deficit will bring another 1987 type crash. The numbers will tell all as stocks become overvaluated.

[sadiesworld]

3. What do the gains look like in euros?

A serious question for seriousstan. :shrug:

[seriousstan]

7. The DOW is an index of stocks, it cannot be defined in monetary units

euros or otherwise.

[reichstag911]

11. But...

...the percentage movement in the Dow over the past x years can be compared to the percentage movement in the euro against the dollar...or vice versa.

[Democrats_win]

18. Harpers Magazine Index showed profits in US dollars vs. Euros

If I recall, profits grew in US dollars by over 20%, while they fell in Euros by 8%. I'm not sure how the Dow reflects the fall of the dollar, which has lost 20% of its value in the past two years.

[reichstag911]

31. That looks about right.

All else held equal (companies, profit$, periods), with only the rate of exchange calculated differently, it worked out to the dollar being worth only 76.666...% of what it was against the euro at the beginning of the period. And despite what the earlier poster stated about the Dow not being denominated in any currency, I believe there are Dow index funds -- which are denominated -- so that would be the place to look. In any case, despite soaring US corporate profits, the dollar is in steep decline, and will remain so as long as Chimp's in charge and running up huge bar tabs (deficits to you and me).

[Warpy]

4. Butbutbutbutbut the stock market is a SURE THING!!

Don't trouble your little head about those P/E ratios. Just put all your social security money into stocks and we'll take care of you!

[Renew Deal]

5. Unemployment went up and job growth was positive?

That must mean that the workforce expanded. I bet the jobs number was cooked because of the .2 increse in unemployment. :wtf:

[tritsofme]

22. Increased unemployment and an increase in payrolls

are not inherantly indicative of wrong doing.

The two reports come from different surveys and are unrelated.

[Renew Deal]

24. I agree

But this is the Bush administration we're talking about. ;) Trust nothing, question everything. This is the same group that changed the inflation calculation for the first time in 60 years. I bet the reason was that they didn't like the results.

[Sirveri]

6. wow, so it finally got back to Clinton levels!

THAT'S JUST GREAT! Proof positive that Bush must be doing the right thing, yes sir ree bob. It finally got back to the same level as Clinton, wow.

[seriousstan]

9. Proof positive tht presidents have no effect on stocks.

Nowhere near the effect of oil prices and public sentiment.

[Career Prole]

23. And much of public sentiment is based on media misrepresentation

based on analysis by experts with vested interests.
I've yet to see a single negative economic report without any available alibi for the downturn featured prominently if not included in the headline.
"Public sentiment" should be more discerning, or the public will be taken for chumps.

[snippy]

30. Maybe, but the stock market has always done better under democratic

presidents than under republican presidents.

The Presidential Puzzle:
Political Cycles and the Stock Market

ABSTRACT

The excess return in the stock market is higher under Democratic than
Republican presidencies: nine percent for the value-weighted and 16 percent for the equal-weighted portfolio.The difference comes from higher real stock returns and lower real interest rates,is statistically significant,and is robust in subsamples.The difference in returns is not explained by business-cycle variables related to expected returns,and is not concentrated around election dates.There is no difference in the riskiness of the stock market across
presidencies that could justify a risk premium.The difference in returns through the political cycle is therefore a puzzle.

http://www.personal.anderson.ucla.edu/rossen.valkanov/Politics.pdf

[TahitiNut]

10. Three and a half years ago was September 11th, 2001.

(Within a week.) Somehow, I don't think 99% of the people in this country have a damned thing to be happy about with this administration and the economy.

[tritsofme]

20. Its at its highest point since June 2001

not September.

[TahitiNut]

8. "3 1/2-Year High"? They still haven't dug themselves out of their own hole

After the dollar is adjusted for inflation and devaluation, they're still deep in their own doodoo.

[brentspeak]

12. That's nice. I'm still not going to support privatized SS accounts.

Social Security is in a "crisis"? Then raise the freaking cap on the SS tax. Can't be too hard, or can it?

[saracat]

13. Yeah. Right. Of course they are

temporarily higher. The companies are "downsized". They are paying less health care and have fewer employees. Notice they say wages are lower too. This heightens productivity, but what happens when all these people with low paying jobs and No jobs, can't buy any more products? Duh! They never see the big picture. Hooray for today, the hell with tomorrow! This is absurd!

[KayLaw]

14. Such a coincidence

It's so surprising how these numbers dovetail with Bush's plans to give our tax dollars to the wonderful money changers.

Can we take our winnings in Euros's do you think?

[Skittles]

15. is the DOW where Clinton left it yet?

just curious

[Igel]

16. Looks like yes, but the chart I found for the Dow is hard

to read.

http://stockcharts.com/charts/historical/djia2000.html

http://stockcharts.com/charts/historical/ for all sorts of charts (click on the one you want; there are charts for groupings of decades at the bottom of the long-term chart).

[tritsofme]

21. Clinton's last day in office the Dow closed at 10,587.

Today its at 10,940.

[Betty]

27. So the net gain after four years

of this freak running the country is less than 400 points. What's that per year, .01% increase?

[NeoConsSuck]

29. NO.

Clinton had the DOW close to 12,000.

[CountAllVotes]

17. DOW rallies as * tours the U.S. to push private Social Security accts.

How convenient! I betcha the stocks will keep rallying up wards during the entire tour to make investing look good! There is money to be made and lets have the big show on television 24/7 so no one will not know! PRIVATIZE some will say! How many will drink the Kool-Aid on this one? HOW MANY?

In fact, I'd be willing to bet on in! :grr:

After the show is over, hopefully we'll be *reminded* that the DOW was below 9,000 less than 3 years ago. People lost their entire retirement savings! And we cannot forget ENRON either. 1929: Maybe we weren't alive to remember it (well there may be a few) but it must never be forgotten! Because of the crash of '29 came with it the Great Depression; hence a Nation in distress that demanded reform - thus the creation of Social Security.

We need to strengthen social security benefits for OUR PEOPLE OF THE USA, not steal it from present recipients nor the generations that follow. We need to make social security better if anything, and that is for EVERYONE!

Unfortunately, it seems that some American people have very SHORT memories! I hope they do not forget the lessons that history has taught us if we are indeed still being "taught"! :grr:

:kick:

[Gyre]

19. There's our proof

That cute little chimp's a winner!@>*#.:grr:

Gyre

[nolabels]

25. This a good thing with them #'s?

The #'s are at the same place they were 3 1/2 years ago and you haven't even figured in inflation and time / labor spent.

Please pass the Kool-Aid, it must be some powerful stuff for anybody thinking that way :crazy:

[mrdmk]

26. This is funny, but...

I thought 360,000 added jobs a month were needed to keep up with population growth. Please correct me if I am wrong!

[moondust]

28. Has Bush broken even on jobs yet?

Must not have or I probably would have noticed the parade.

[54anickel]

32. HA, seems the equity investors didn't bother to read the actual report

then, while the Treasury investors did and weren't the least impressed by it. Stocks went up, Treasuries went up (yields down), and the dollar took yet another dip. Wages (the only inflation that counts to Greenspin) stayed flat - that means real earnings (measured with the inflation lies of the CPI and PPI) dropped again. We are still working and doing "more with and for less".

There is far too much complacency in the markets these days. I would imagine it has to do with all that "reassurance" coming from BeelzeBush on both the "greater returns" offered by the markets, and the idea that foreigners will continue to purchase our debt instruments because "they are such a great investment". Yet volumes haven't been anything to write home about. Personally, I smell a huge sucker's rally - big money is out, pensions are chasing derivatives and hedge funds for better returns, yet not being equally compensated for the risks involved.

The question is how long can they keep it up? :shrug: The repatriating of foreign earnings this year thanks to the tax break in the Jobs Creation Act might keep this Ponzi scheme going through the 3rd quarter, there's been plenty of stock buy backs going on (if we were in an expansion, wouldn't you think they'd be investing in capital to support company growth instead?). Then there's all that M&A activity going on as well as corporations cannibalize each other - never good for employment but great for stocks. :eyes:

Some snippets from the report:

The employment-population ratio--the proportion of the
population age 16 and over with jobs--was little changed over the month at 62.3 percent. The rate has fluctuated between 62.1 and 62.5 percent for the past 2 years.

Over the year, the number of persons who held more than one job increased by 432,000 to 7.7 million, not seasonally adjusted. These multiple jobholders represented 5.5 percent of total employment in February, up from 5.3 percent a year earlier. (See table A-13.)

In February, manufacturing added 20,000 jobs, with motor vehicles and parts accounting for about half of the job gain. The increase in motor vehicles employment (11,000) reflected the return of auto workers from larger-than-usual temporary layoffs in January. While total manufacturing employment edged up over the year, it has shown little net change since mid-2004.

Employment in a number of service-providing industries grew over the month. Professional and business services employment expanded by 81,000 in February. Within this sector, sizable increases occurred in employment services (38,000), services to buildings and dwellings (14,000), and architectural and engineering services (7,000). Within employment services, temporary help services added 30,000 jobs in February and 207,000 jobs over the year.



http://www.bls.gov/news.release/empsit.nr0.htm

[mrdmk]

33. Another words, we are doing everything we can to hold a flat line

eom

[bling bling]

34. I was hoping to see this analyzed from one of our

DU daily stock update team. Thanks for the input. I had a feeling it was something like you said.

[nolabels]

35. Well if you ponder * & co might ramrod some type of Soc.Sec. crap in .....

then the uptick in stock prices might make sense. I wounder what sectors or players are kicking it higher (that slight bit that it is). It's all a fixed casino anyway, the only people who see return on their investment are the daddy-war-bucks and the brokerage houses.