CLOSING WRAP-UP, March 9

The major market indices moved higher at the open following the February employment report. Nonfarm payrolls rose by 97,000 during the month, with the prior two months revised higher by a total of 55,000. The total number of jobs added the past three months was larger than expected, easing some concerns about a recession forming. However, there were concerns about the continued rise in average hourly earnings.

Earnings were expected to rise 0.3 percent during the month, but actually shot higher by 0.4 percent. This puts year on year gains in average hourly earnings at 4.1 percent. This isn't likely to sit well with the Fed, which is why Fed fund futures moved higher on the news. The odds of a Fed rate cut in the first half of the year dropped in half from 65 percent before the report to 32 percent after.

Chip stocks were able to see gains Friday following a rise in shares of National Semiconductor (). NSM gained 4.51 percent to $26.42 following its earnings release last night. The chip maker announced that inventory problems had been corrected and though NSM remains a bit cautious, they are optimistic that the worst if over for the chip sector. The Philly Semiconductor Index () tacked on three-quarters of a percent.

The sub-prime lending sector has really taken a hit of late, due to loan defaults. New Century Financial () started it all and they are taking the biggest hit. After trading near $50 mid-2006, the stock closed Friday at $3.21, down 17.05 percent on the session. The company announced it wasn't taking any new loan applications as it has found difficulty finding investors to fund these sub-prime loans. This has raised questions about whether NEW will need to file for bankruptcy protection.

For the week, the major market indices all gains about one percent. This is a positive sign, as it shows a base building. In fact, the 12,000 level for the Dow has acted as support and the bulls now hope a new rally can start from this base.

Jody Osborne 字串4
Senior Staff Writer & Options Strategist
Optionetics.com ~ Your Options Education Site
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