MORNING WATCH, Mar 9
source:By Frederic Ruffy admin 2007-3-10 04:36:31The US economy added 97,000 new jobs during the month of February, according to government stats released Friday morning. That number was a bit shy of the 100,000 jobs economists expected. However, January numbers were revised up to 146,000 from 111,0000. The unemployment rate, which was expected to remain unchanged at 4.6%, fell to 4.5% and average hourly earnings rose .4%, compared to expectations for a .3% increase.
Bonds are taking a hit. The revision to January numbers, the decline in unemployment rate and the jump in hourly earnings suggest that the labor market might be holding up better than expected. Rate expectations are changing. The benchmark ten-year Treasury note is down 20 ticks. It's yield, which has been testing the 4.5% level over the past few days, is approaching the 4.6% level. The buck is also finding strength on expectations of higher rates in the US. The greenback is trading up 1.11 to 118.27 on the yen and up .0043 to 1.3090 on the euro.
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In other economic news, the nation's trade deficit narrowed a bit more than expected. According to the latest stats, the US imported $59.1 billion more goods than it exported during the month of January, compared to $61.5 billion the previous month. Economists were looking for the gap to decline to $60 billion. A report on wholesale inventories is due out at 10:00 a.m. Eastern time. Economists expect the report to show a .1% increase in January, but the data doesn't hold much market moving potential in light of today's payroll report.
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Not much individual stock news to report. National Semi () might help the chip sector after posting quarterly profits of 22 cents a share, which beat by two cents. The Wall Street Journal is reporting that Yahoo () and AT&T () are negotiating "sweeping changes" that could change their partnership agreement in 2008 and cost Yahoo "millions in revenues." Meanwhile, the woes in the subprime sector continue. In the latest development, New Century () has stopped issuing new loans after some of its financial backers are no longer providing financing. Yesterday, shares of the subprime mortgage company sank 25% on concerns about its financial stability.
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Meanwhile, trading elsewhere is relatively quiet this morning, with mixed action in the Asia/Pacific markets and in Europe. Gold is not much changed either. Crude oil is sitting up a nickel to $61.69. The US equity market is set open modestly higher as well after the latest payroll numbers helped to ease recent concerns that problems in housing are spilling over into the broader economy. Stock index futures, which were sitting lower prior to the data, spiked higher and now point to early strength for the major averages Friday morning. ×Ö´®3
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Frederic Ruffy
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