So will the Dow reach the 11,000 mark this week ahead of the surprise release of the March employment and unemployment data on Good Friday, US time?
The March employment report will be released at 8.30 am on Good Friday morning in the US, with every major western market closed.
And, once there, what will investors do, sell and take their profits as they did when the US markets have tried to consolidate at this level (in January).
US markets are now around 18 month higher (but 38% below their peak).
Now there’s been a small surge in bond yields to remind investors that the US (and UK) are big debtor countries.
With Greece sort of sorted by the European Union and the 16 eurozone countries, with help from the IMF, other big debtor economies will swing into view.
The euro will remain weak; to achieve meaningful cuts in budget deficits and debt by 2013, every eurozone economy is going to have to suffer some level of austerity, and therefore lower economic growth and unemployment at higher levels for longer.
That also means more debt, which will take longer to reduce.
But with expectations of the best jobs performance in the US for more than 30 months last month, investors will ignore all the what ifs and maybes and try and take share prices higher.
With no trading until next Monday the long Easter weekend could be very nerve-wracking, so expect many investors to avoid going long over the holiday, just in case there’s a hiccup in the figures.
But watch bond yields, it’s about time there was another outbreak of fear and loathing to scare investors.
It’s not that there’s anything new: rates were around the 3.90% in the middle of last year, but eased as it became apparent the recovery would be much slower and that the Fed would keep its key rates at a record low for "an extended period".
For more than a year, analysts have been warning that huge debt sales by the US Treasury would put pressure on bond yields and force them higher.
But weak inflation, rising unemployment, the housing market slump, the Federal Reserve’s policies of a near zero overnight borrowing rate and its purchase of up to $US1,700 billion in bonds have all helped keep Treasury yields near historic lows.
Last week, the yield on 10-year bonds jumped from 3.65% to a peak of 3.93% on Thursday. On Friday it closed easier at 3.87%.
The cause of the spike was the auctioning of $US118 billion of new US debt which was poorly received and saw a sharp rise in yields as reluctant buyers forced them higher.
The Fed completes its bond buying program next week, leaving the market to absorb the supply of new debt on its own.
That could impact the housing sector where the Fed has been the only buyer of mortgage backed securities.
But it’s the March employment report which looms as a test for bond market sentiment; a strong jobs figure could drive bond yield higher as investors in that market again develop another attack of nerves about the size of the government’s future debts.
The Dow closed above 10,850 on Friday, it would need to rise 1.4%, or 150 points, to reach 11,000 level.
The market had started Friday higher from Europe, but ended weaker.
That saw the Dow and S&P 500 end flat on the day.
Four small US banks failed on Friday, after the market closed; that’s 41 for the year so far. Two banks in Georgia (37 so far since mid 2007, the most in any state), one in Utah and one in Florida.
The Dow rose 9.15 points to end at 10,850.36.
The Standard & Poor’s 500 Index ended up just 0.86 of a point at 1,166.59 and Nasdaq Composite Index eased 2.28 points to end at 2,395.13.
The day’s main economic news was the Commerce Department report that gross domestic product expanded at an annual rate of 5.6% in the fourth quarter, instead of 5.9% as reported in the second estimate last month.
And the Thomson Reuters/University of Michigan’s Surveys of Consumers consumer sentiment index came in at a final March reading of 73.6, above market expectations, but unchanged from February.
In Australia the ASX 200 share index ended up 11.5 points at 4896.9 and the All Ordinaries index was 8.9 points higher at 4905.2.
Both indexes had been down as much as 1% for the day.
For the week, the gain for the ASX200 was only 0.5%, just enough to lift the winning streak to seven weeks.
That’s the longest run of weekly gains since October 2007.
The MSCI Asia Pacific Index rose 1.1% and is now up 9% from its lowest level in more than two months in early February.
Tokyo’s climbed 1.6% to 10,996.37, its highest close since October 2008 and the biggest advance among Asia-Pacific markets.
China’s Shanghai Composite Index and Hong Kong’s Hang Seng Index rose 1.3%. South Korea’s Kospi Index was up 0.6%.
In Europe, 17 out of 18 western European markets saw weekly gains.
London’s FTSE 100 rose 0.9%, Germany’s DAX 2.3% and France’s CAC 40 was up 1.6%.
Greece’s ASE Index jumped 4.8% in the wake of the EU deal on its debt support package for the country.
The Stoxx Europe 600 Index added 1.3% in the fourth straight weekly advance. It’s up 7.2% so far this month.
