BLBG: U.S. Stocks Advance After Job Growth Exceeds Estimates
U.S. stocks rose, with the Standard & Poor’s 500 Index extending a record, as investors speculated that better-than-forecast jobs data indicate the economy is starting to bounce back from a weather-induced setback.
The S&P 500 climbed 0.3 percent to 1,881.96 at 9:30 a.m. in New York.
“This is obviously good news and it suggests the economy remains on an upward track,” Alan Gayle, a senior strategist at RidgeWorth Capital Management in Richmond, Virginia, which oversees $50 billion, said in a telephone interview. “This report is going to be very supportive for those who think the growth slowdown is temporary.”
The 175,000 gain in employment last month followed a revised 129,000 increase in January that was bigger than initially estimated, Labor Department figures showed today. The median forecast of economists in a Bloomberg survey called for a 149,000 advance in February. The jobless rate unexpectedly climbed from a five-year low, rising to 6.7 percent from 6.6 percent.
The S&P 500 has added 1 percent this week as economic data from manufacturing to consumer spending surpassed estimates and investors speculated tension in Ukraine would not worsen into a wider conflict. The gauge rose 0.2 percent yesterday after jobless claims fell to a three-month low.
Today’s jobs figures showed 601,000 Americans weren’t at work because of weather during the survey week, the most since 2010, the report indicated.
‘Wonderful Thing’
“Everybody was expecting this to come in much softer than it did,” Darrell Cronk, the New York-based regional chief investment officer at Wells Fargo Private Bank, which manages $170 billion, said by phone. “I think this number will help solidify the continued Fed exit and that the economy remains on track for a recovery. The more we can add jobs and get the economy to organically grow through traditional measures is a wonderful thing.”
The Federal Reserve is trying to determine how much of the recent economic cooling has been due to weather, which means the outlook for monetary policy may not become clearer until March data becomes available. Reports including housing and hiring missed economists’ forecasts in December and January amid severe winter weather.
Data this week showed manufacturing expanded at a faster pace than projected in February, while consumer spending rose in January at a better rate than forecast.
Three rounds of Fed stimulus have helped push the S&P 500 up 177 percent from a 12-year low, as U.S. equities are set to enter the sixth year of a bull market that started March 9, 2009.
In the Ukraine, the government said today that the results of a planned March 16 referendum on Crimea becoming part of Russia won’t stand. Ukraine, a key transit nation for east-west energy supplies, is struggling to keep hold of Crimea after pro-Russian forces seized control of the peninsula. The West has urged Russia to pull back, and began yesterday to impose sanctions.
To contact the reporters on this story: Nikolaj Gammeltoft in New York at ngammeltoft@bloomberg.net; Callie Bost in New York at cbost2@bloomberg.net
To contact the editors responsible for this story: Lynn Thomasson at lthomasson@bloomberg.net Jeremy Herron, Srinivasan Sivabalan
