Stocks rise modestly on February jobs report

0
11

Stocks rose Friday after the February jobs report bolstered hopes that the economic recovery is on track. The gains were tempered by news that Greece’s debt-relief deal could cause big losses for some banks.

Three years after stocks hit their Great Recession low, the Dow Jones industrial average rose nearly enough to erase this week’s losses, which include Tuesday’s 203-point dive, the worst one-day drop so far this year. The Dow lost ground after the trade group that oversees financial derivatives said a debt-relief deal for Greece will trigger payouts on bond insurance.

The Dow was up 11 points, or 0.1 percent, at 12,918 as of 3:15 p.m. Eastern time. The Standard & Poor’s 500 gained 5, or 0.3 percent, to 1,370. The Nasdaq composite average rose 14, or 0.5 percent, to 2,984.

The Dow has nearly doubled in the three years since its post-financial crisis bottom. On March 9, 2009, it closed at 6,547. The S&P 500 closed at 676, also a recession-era low.

The morning’s gains were driven by news that employers added 227,000 jobs last month, finishing three of the best months for hiring since the recession began. The unemployment rate was unchanged at 8.3 percent as workers streamed into the labor force.

The hiring was spread across a range of industries, including manufacturing, mining and professional services such as accounting.

Later Friday, the International Swaps and Derivatives Association said it had determined that a massive bond-swap by Greece constituted a “credit event,” meaning that holders of credit-default swaps on Greek bonds will be able to claim insurance payments. Many had feared big losses for banks that had sold the insurance.

Greece convinced most of its private creditors had agreed to swap their bonds for new ones worth far less. The deal clears the way for a fresh bailout from Greece’s neighbors. Fears of a Greek default have weighed on the market for two years.

“There’s a lot less imbalance and a lot less uncertainty than there was three years ago,” said John Canally, investment strategist with LPL Financial Corp. Canally said the odds of another recession have been dropping as the economic recovery strengthens and becomes less vulnerable to shocks.

Yet Canally warned investors against assuming that the market’s current breakneck rise will continue. Canally said his firm recently started slowing down its stock purchases because of how quickly the marked has rallied this year. The S&P 500 is up 9 percent for 2012.

European stocks added to their gains after the U.S. market opened. France’s benchmark indexes closed 0.3 percent higher, Britain’s 0.5 percent higher and Germany’s 0.7 percent higher.

Also Friday, the Commerce Department said the U.S. trade deficit surged in January to the widest imbalance in more than three years as imports hit an all-time high, reflecting rising demand for foreign-made cars, computers and food products.

Exports to Europe fell, raising concerns that economic contraction across most of the continent will hurt U.S. corporate profits.

The dollar rose and Treasury prices fell. The yield on the 10-year Treasury note rose to 2.04 percent from 2.02 percent shortly before the jobs report came out.

Among stocks making big moves on Friday:

? Green Mountain Coffee Roasters Inc. plunged 16 percent after its larger rival, Starbucks Corp., said it will start selling single-cup coffee machines. That could deflate demand for Green Mountain’s Keurig machines. Starbucks rose 2 percent.

? Texas Instruments fell 1 percent after the chipmaker lowered its forecast for revenue and earnings in the first quarter, blaming weaker demand for wireless products.

? Smith & Wesson Holding Corp. leaped 23 percent after the maker of guns and security systems beat analysts’ expectations for third-quarter earnings and raised its full-year guidance.

___

Follow Daniel Wagner at www.twitter.com/wagnerreports .