Markets

Mid-Day Update: Stocks Rebound From Mid-Morning Dip; Industrials, Consumer Cyclicals Leading Come-Back

Stocks were on the upswing again this afternoon, reversing a mid-morning slump triggered by worries today's surprisingly strong jobs report could prompt the Federal Reserve to withdraw its monetary stimulus sooner than expected.

Industrial and consumer discretionary stocks were leading the markets back into positive territory, with smaller gains for shares of energy and materials companies. The worst performers were consumer staple and utility, typically defensive sectors that lag other sectors during risk-on trade.

Shares surged out of the gate after nonfarm payroll employment jumped a stronger-than-expected 236,000 during February, the Labor Department reported today, beating market expectations by 71,000. The unemployment rate, measured by a separate household survey, also dropped by 0.2% to 7.7% last month.

Private employment was particularly strong, climbing by 246,000 in February following around 140,000 new hires in January, although the latter number was lowered by 26,000 from last month's report. Today's report also found another uptick in public sector layoffs, with another 10,000 net job losses in February following a upwardly revised 21,000 government workers losing their jobs in January.

Overall, the data should be positive for stocks today while weighing on fixed income, according to Andrew Grantham, an economist with CIBC World Markets, in a research note this morning. The recent upturn in the housing market also should remain positive for job creation, he said, with 48,000 new jobs in the construction sector added during February alone.

Also today, the Commerce Department said U.S. wholesalers boosted stockpiles by the largest amount in 13 months during January despite a big drop in sales. Inventories at the wholesale level rose 1.2% from the prior month, the largest rise since December 2011. Sales for wholesalers fell 0.8% in January. Inventories grew a slight 0.1% in December while sales at the wholesale were flat.

Commodities were mixed. Crude oil for April delivery was down 35 cents to $91.21 per barrel. April natural gas was up 3 cents to $3.61 per 1 million BTU. April gold was down 60 cents to $1,574.50 per ounce while May silver was up 18 cents to $28.99 per ounce, continuing its recent unlinking from gold price direction. May copper was down 1 cent to $3.51 per pound.

Among energy ETFs , the US Oil Fund was down 12 cents to $32.82 and the US Natural Gas Fund was up 22 cents to $19.93. Among precious-metal funds, the Market Vectors Gold Miners ETF was up 19 cents to $37.10 and the SPDR Gold Shares ETF was down 28 cents to $152.41. The iShares Silver Trust was up 11 cents to $28.03.

Here's where the markets stood at mid-day:

NYSE Composite Index up 18.01 (+0.20%) to 9,031.45

Dow Jones Industrial Average up 50.45 (+0.35%) to 14,379.94

S&P 500 up 4.04 (+0.26%) to 1,548.30

Nasdaq Composite Index up 8.10 (+0.25%) to 3,240.19

GLOBAL SENTIMENT

Nikkei 225 Index up 2.64%

Hang Seng Index up 1.41%

Shanghai China Composite Index down 0.24%

FTSE 100 Index up 0.57%

NYSE SECTOR INDICES

NYSE Energy Sector Index down 0.11% to 13,148.73

NYSE Financial Sector Index up 0.19% to 5,515.21

NYSE Healthcare Sector Index up 0.04% to 8,590.14

UPSIDE MOVERS

(+) P, (+17.3%) CEO Joseph Kennedy announced plans to step down as soon as a replacement can be hired. Also, the Internet music service reported a $0.04-per-share Q4 net loss, a penny better than analysts were expecting. Revenue climbs 54% to $125.1 mln, beating the analyst consensus by $2.3 mln.

(+) CLDX, (+14.1%) Cantor Fitzgerald raised price target by $3 to $16 a share, expecting the company to begin receiving revenues from its CDX-o11 and rindopepimut drug candidates in 2016, a year earlier than first anticipated.

(+) WG, (+11.2%) Analysts at Johnson Rice today raised the rating for shares of the oilfield services company to Overweight from Equal Weight with a $10 price target.

(+) HRB, (+8.5%) Tax preparation firm said volume for tax filings expected to rise 1% to 2% over year-ago levels during its fiscal Q4 ending April 30, overshadowing disappointing Q3 results.

DOWNSIDE MOVERS

(-) SKUL, (-22.5%) reported Q1 loss of $0.25 to $0.30 per share, well under the $0.25 per share profit analysts were expecting.

(-) MED, (-10.2%) Q1 guidance trailed Street view. Sees EPS of $0.32 to $0.35, at least $0.10 per share below analyst forecasts. Revenue of $93 mln to $95 mln lags expectations by $6.1 mln. Weak outlook overshadows Q4 earnings and revenue both topping estimates.

(-) ANGO, (-11.3%) Reported preliminary Q3 earnings of $0.04 to $0.06 per share, trailing the analyst consensus by at least $0.03. Projected 2.4% decline in quarterly revenue from last year to $81 mln, missing the analyst consensus by at least $6 mln.

(-) MXWL, (-12.1%) Will restate financial results for all of 2011 and 2012 after audit uncovers errors in how revenues were recognized, explaining it does not believe there was a fixed sales price at the time of sales to certain distributors nor could collection be reasonably assured.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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