US stocks ended higher on Friday and the Standard & Poor’s 500 posted its best week in the last nine as the market pressure for a correction and investors puzzled over a very conflicting January jobs report.
The Dow Jones Industrial Average rose 29.44 points, or 0.24%, to 12,091.70, the Standard & Poor’s 500 Index was up 3.73 points, or 0.3%, at 1310.83, while the Nasdaq Composite Index added 15.42 points, or 0.6%, to 2769.30.
For the week, the Dow was up 2.3%, the S&P 500 was up 2.7% and Nasdaq was up 3%.
The strong week in fact more than offset the weak week the week before.
Investors had been looking for a solid employment report to help validate other positive economic news and the growing bullishness generally.
Instead of that, it was confusion as a low 36,000 jobs were added in January, far less than expected.
That was put down to the impact of severe snow storms across the country.
But then the unemployment rate fell to 9%, down 0.8% from November and 0.4% from December. It was the lowest level since April 2009.
That should not really have happened as analysts were left wondering at the confused data in what’s called the establishment survey and the household survey which measure jobs and the labour market.
That looks like it cut the payrolls gain reported by US employers to just a quarter of the 145,000 jobs economists had forecast.
But a separate household survey, which is used to determine the jobless rate, showed nearly 600,000 more people reported they were employed. It also showed people had left the workforce and stopped looking for work.
Despite the conflicting signals, economists generally agreed a job market recovery was proceeding.
But many investors saw the data as strong. Government bonds sold off, and the US dollar rallied against the yen and the euro.
But the more cautious investors and analysts are waiting for the current earnings reporting season to end, and then the February employment data to see if the picture is any clearer.
They say that if all is OK then the February and March employment reports could see large numbers of new jobs created, but if it’s still sluggish, then they will start questioning the sustainability of the earnings rebound.
Elsewhere in the US on Friday regulators closed two banks in Georgia and one in Illinois on Friday, bringing the number of failures so far in 2011 to 14.
In 2010, 157 banks failed and 140 failed in 2009.
The failures have increasingly been smaller institutions, with less than $1 billion in assets, as the trio on Friday were.
US investors rotated into defensive and lagging sectors last week in a move that could intensify in coming weeks.
Profit reports from US retailers in coming weeks will test that.
Food company reports start appearing this week and will provide another measuring stick, especially about the impact of rising food prices and raw material costs.
In Europe the markets had a solid week, rising for a second week in a row.
The benchmark Stoxx Europe 600 Index closed up 1.9% and has now added 3.7% so far this year
Bloomberg said that national benchmark indexes rose in 14 of Europe’s 18 western markets. France’s CAC 40 Index rose 1.1%, London’s FTSE 100 Index rose 2%, while Germany’s DAX Index advanced 1.6%.
Greece’s market jumped 4.4%.
Asian markets were impacted by closures for part of the week for the Lunar New Year.
The MSCI Asia Pacific Index rose 0.6 % on Friday and 1.7% for the week.
Stockmarkets in China, Hong Kong, South Korea, Taiwan, Vietnam and Singapore were closed for all or part of the week.
Trading will resume today.
That left trading concentrated in Japan (up 1.1%), India down 2.4%, New Zealand up half a per cent and Thailand rose 0.4%.
The Australian market rose 0.9% on Friday as investors got over their cyclone fears.
Friday’s close was a 10 month high.
For the week it was up 1.8%.
After the share price index closed marginally higher on Saturday, our market will open a touch firmer this morning.
Earnings will dominate the news this week here.
