U.S. stocks drifted between gains and losses after the unemployment rate climbed to a 25-year high of 8.5 percent, matching economists’ estimates. Oil retreated and the dollar gained. Alcoa Inc. and Microsoft Corp. fell at least 1.6 percent as the government said employers cut 663,000 jobs last month, 3,000 more than the average estimate in a Bloomberg survey of economists. Citigroup Inc. and JPMorgan Chase & Co. slipped more than 1 percent after Goldman Sachs Group Inc. said changes to fair-value accounting rules won’t spur a rally in financials. The Standard & Poor’s 500 Index added 0.1 percent to 835.47 at 9:35 a.m. in New York. The gauge is poised to advance for a fourth straight week, the longest rally since the bear market began in October 2007. The Dow Jones Industrial Average lost 1.83 points, or less than 0.1 percent, to 7,976.25. Treasuries were little changed. “The market’s had a nice run up the past four weeks and we’re a little overbought,” said Bruce Bittles, the Nashville- based chief investment strategist at Robert W. Baird & Co., which oversees $16 billion. “No matter how you feel about the stimulus package, some of it is going to stick and the economy should stabilize in the second or third quarter. If that’s going to happen the market should sniff it out.” The S&P 500 has surged 23 percent since sinking to a 12- year low of 676.53 on March 9 as banks from Citigroup Inc. to JPMorgan Chase & Co. said they made money in the first two months of 2009 and Treasury Secretary Timothy Geithner unveiled plans to finance as much as $1 trillion in purchases of distressed assets from financial firms. Financials Rally Financial shares in the index have led the rebound, surging 54 percent collectively from March 6 through yesterday as Federal Reserve Chairman Ben S. Bernanke delivers record-low mortgage rates and a refinancing boom that’s putting cash in consumers’ pockets. Fixed 30-year mortgage rates fell to a record low for the second consecutive week last week, hitting 4.78 percent, Freddie Mac said yesterday in a statement. Home-loan applications in the U.S. rose for the fourth straight week last week as a decline in borrowing costs spurred homeowners to refinance, while purchases of new houses unexpectedly rose in February. All 10 industry groups in the S&P 500 have climbed at least 11 percent since the index hit a 12-year low on March 9, with industrial, raw-materials and so-called consumer discretionary companies rallying more than 30 percent through yesterday. The S&P 500 has trimmed its 2009 loss to 7.6 percent from as much as 25 percent. The benchmark index for U.S. stocks slumped 38 percent last year, its worst annual return since the Great Depression, after mounting credit-market losses dragged the nation into a recession. Earnings for companies in the index decreased 61 percent in the fourth quarter of 2008, according to data compiled by Bloomberg. The first quarter of 2009 is projected to be the ninth straight decline in corporate profits, the longest since the government began tallying quarterly data in 1947.

Source