Biggest 3-Month Gain In The Dow Since 1999

 

 

DailyMarkets.com (New York) - U.S. stock markets were closed Friday for Good Friday. For the holiday shortened week, major stock indices climbed for the fifth consecutive week ahead of the government's March employment report, with the Dow having its longest winning streak since April last year. The Dow rose 0.7% to close at 10,927.07; the S&P 500 index gained 1% to 1,178.10, and the Nasdaq climbed 0.3% to 2,402.58.

On Friday, the Labor Department announced that U.S. employment in March increased the most in three years. 162,000 jobs were added, the third increase in the past five months. Although the headline number fell short of the forecast of a 184,000 increase, the gain indicated a turning point for the labor market as the U.S. economy recovers from the worst recession since the Great Depression.

The increase included 48,000 temporary workers hired by the government to conduct the census. The unemployment rate held steady at 9.7% for a third month. There were some negatives in the payrolls report: Average earnings per hour declined in March, and the number of people working part-time rose as they couldn't find full-time jobs.

A stronger-than-expected U.S. manufacturing report and consumer spending report led to gains in stocks. The ISM manufacturing index rose to 59.6 in March from 56.5 in February, much better than the forecast of 57. It was the fastest growth since July 2004. Meanwhile consumer spending increased for a fifth straight month in February.

For the quarter, the Dow rose 4.1%, the best first-quarter performance since 1999. The S&P 500 gained 4.9%, its best first-quarter since 1998.

In forex trading, the US dollar gained against major currencies after the release of the U.S. non-farm payrolls report. For the week, the US dollar rose 2.2% against the Japanese yen to 94.69 - the highest level since August last year.

However, the greenback had its first weekly decline against the Euro since March 12, falling 0.6% to 1.3484. EUR/USD hit a high of 1.5144 in November last year. For the quarter, EUR/USD fell 5.7%, the largest three-month decline since September 2008. The Japanese yen was sold broadly, and against the Euro, it fell 2.7%, its second weekly loss.

The jobs report boosted investors' optimism that the U.S. economy is healing and that recession is certainly over. Futures on the CME exchange showed a 60% odds that the Fed will increase the target rate for overnight bank lending by at least 25 basis points by November, up from 45% chance a month ago.