US Stocks May End Bullish Amid Upbeat Jobs Data

By Modupe Gbadeyanka

The major U.S. index futures are pointing to a higher open on Friday following the release of a report from the Labor Department showing stronger than expected job growth in the month of February.

The upbeat jobs data has reinforced expectations of an increase in interest rates at next week’s Federal Reserve meeting. CME Group’s FedWatch tool is currently indicating a 93.0 probability of a quarter-point rate hike by the central bank.

With the monthly jobs report looming, stocks showed a lack of direction throughout the trading session on Thursday. The major averages spent the day bouncing back and forth across the unchanged line.

The major averages eventually closed slightly higher. The Dow inched up 2.46 points or less than 0.1 percent to 20,858.19, the Nasdaq crept up 1.25 points or less than 0.1 percent to 5,838.81 and the S&P 500 edged up 1.89 points or 0.1 percent to 2,364.87.

The choppy trading on Wall Street came as traders seemed reluctant to make significant moves ahead of the release of the Labor Department’s closely watched jobs report on Friday.

The report is expected to show that employment increased by about 195,000 jobs in February after jumping by 227,000 jobs in January. The unemployment rate is expected to dip to 4.7 percent from 4.8 percent.

A report showing continued job growth in the month of February is likely to further reinforce expectations that the Federal Reserve will raise interest rates at its monetary policy meeting next week.

Ahead of the monthly jobs report, the Labor Department released a report this morning showing a rebound in initial jobless claims in the week ended March 4th.

The report said initial jobless claims climbed to 243,000, an increase of 20,000 from the previous week’s unrevised level of 223,000. Economists had expected jobless claims to rise to 235,000.

The bigger than expected increase came after jobless claims fell to their lowest level since March of 1973 in the previous week.

The Labor Department also released a report showing that import and export prices both rose by slightly more than anticipated in the month of February.

Traders were also digesting the European Central Bank’s widely expected decision to leave interest rates unchanged and maintain its asset purchase program.

The ECB said it stands ready to increase the size or duration of its asset purchase program if the economic outlook becomes less favourable.

In his subsequent press conference, ECB President Mario Draghi said risks surrounding the euro area growth outlook have become less pronounced but remain tilted to the downside.

Most of the major sectors showed only modest moves on the day, contributing to the lackluster performance by the broader markets.

Commercial real estate stocks saw significant weakness, however, with the Morgan Stanley REIT Index slumping by 1.5 percent. The drop extended a recent downward trend by the index, which fell to a nearly three-month closing low.

Notable weakness was also visible among gold stocks, as reflected by the 1.3 percent loss posted by the NYSE Arca Gold Bugs Index. The index fell to its lowest closing level in over two months.