U.S. Economy lost jobs, more and more concern to a recession
Global Market
Employers in the U.S. cut again in last month, signaling that the economic contraction is deepening and Fed will continue to lower interest rates. Payrolls shrank by 80,000, it is more than forecast. The jobless rate rose to 5.1 percent. Traders raised bets the Fed will cut rate half a point. Fed signaled increasing concern about the economy and credit markets as Ben S. Bernanke saying that the U.S. may enter a recession. Treasuries climbed, with 10-year note yields falling to 3.50 percent. Odds of a half-point rate cut at the Fed rose to 38 percent. Stocks dropped. Workers' average hourly wages were 3.6 percent higher than last year.
The job figures come a week before the spring meetings of IMF and G7 in Washington. IMF said that the U.S. economy has slowed to halt, it is hurting global growth prospects. IMF forecasts showed the fund characterized the U.S. financial crisis as worst as the Great Depression.
A weak economy and job losses are bad news for Republicans to hold onto the White House. In the four presidential elections that have closely followed a recession, the challenging party has won. Democratic presidential candidates called for an economic stimulus bill to give the economy a boost. Meanwhile Republican nominee called for lower taxes and streamlined regulations to create more jobs.
Factory payrolls shrank by 48,000 workers. The drop included a loss of 24,000 jobs in the auto manufacturing and parts industries. Economists had forecast a decline of 35,000 in manufacturing jobs. The walkout by workers at GM parts supplier over pay and benefits has idle half of GM's North American workforce. Ford Motor Co. may also cut more jobs in North America. Builders eliminated 51,000 jobs. Service industries added 13,000 workers. Retail payrolls decreased by 12,400. Financial firms payroll decreased by 5,000. It is mounting the collapse in subprime lending.
This year, financial firms have reduced staff in fixed income trading, securitization and investment banking. Lehman has eliminated 18 percent, Morgan Stanley has cut 6.2 percent, and Merrill Lynch & Co. has trimmed 4.5 percent.
The average work week lengthened to 33.8 hours from 33.7 hours. Average weekly hours worked by production workers increased to 41.3 from 41.2, while overtime increased to 4.1 hours from 4 hours. That brought average weekly earnings up by $3.47 to $603.67. Workers' average hourly wages rose to $17.86.
Economists are forecasting a prolonged recession. Fed state that the central bank is ready to respond to whatever situation evolves and cited considerable stress in markets. Policy makers must continue to act forcefully.
Stock Market
U.S. stocks gained as a rally in commodity producers and utilities overshadowed the biggest loss in jobs since 2003.
Exelon Corp. led gains in utilities as speculation that the Federal Reserve will slash interest rates pushed bond yields lower and made dividend-paying stocks more attractive. Exxon Mobil Corp. helped push energy shares higher as oil climbed above $105 a barrel. Freeport-McMoRan Copper & Gold Inc. advanced again after copper prices rose.
The Standard & Poor's 500 Index added 9.47 points to 1,378.78. The Dow Jones Industrial Average rose 52.84 to 12,678.87. The Nasdaq Composite Index increased 25.08 to 2,388.38.
Exelon rose $1.86 to $84.99. AES Corp. added 39 cents to $17.32. Utilities Index's dividend yield became more attractive as rates on Treasuries retreated following the jobs report. The 10-year note's yield fell to 3.49 percent.
Payrolls dropped by 80,000 that was more than initially reported. The jobless rate rose to 5.1 percent from 4.8 percent. Economists estimated payrolls would shrink by 50,000 workers and the unemployment rate rise to 5 percent.
Exxon added $1.11 to $89.21. Chevron Corp. increased 84 cents to $88.56. Crude oil for May delivery rose to $105.60 a barrel as the dollar fell against the euro, prompting investors to purchase commodities as a hedge against inflation.
Massey Energy Co. sparked a rally in coal producers after saying it expects higher metallurgical coal prices and will increase spending to capitalize on the demand.
Massey shares added $8.09 to $47.97. Peabody Energy Corp. rallied $2.38 to $57.57. Arch Coal Inc. gained $3.32 to $49.23. Freeport-McMoRan climbed $4.27 to $107.96 as copper jumped.
Mosaic Co. advanced $10.68 to $115.20. Third-quarter profit topped estimates because of rising crop-nutrient prices.
Allegheny Technologies Inc. surged $6.09 to $81.14. Investors purchased shares on speculation that the specialty-metal producer is a takeover target.
General Motors Corp. dropped 75 cents to $20.84. Investors pulled out cash to allow Delphi Corp. to emerge from bankruptcy. GM said it would take a bigger role in rescuing Delphi.
Currencies
The dollar fell against the euro and dropped versus the yen as a report showed the U.S. lost jobs, increasing concern the economy is falling into a recession.
An index tracking the dollar against major currencies fell as futures traders raised bets the Fed will cut rate by a half-percentage point. Currencies of commodity exporters led advances against the dollar as raw-materials prices rose.
The dollar fell to $1.5726 per euro. It dropped 0.6 percent after the jobs report was released. The dollar decreased to 101.79 yen. The euro traded at 160.07 yen.
Canada's dollar depreciated against major currencies as the country's job growth less than economists' forecasts. The unemployment rate rose.
Norway's krone rose against the dollar after crude oil increased to $105 as U.S. currency's decline encouraged investors move to commodities. Australia's dollar rose 0.6 percent and Brazil's real gained 0.7 percent.
Norway is one of the largest oil exporter. Exports of raw materials account for 17 percent of Australia's economy. Brazil's real gained 18.6 percent in a year, buoyed by a surge in exports of sugar, soybeans, iron ore and orange juice.
Analyst predict that U.S. currency will depreciate more, falling to $1.65 per euro and 80 yen this quarter.
The euro was headed for a decline against major currencies, on speculation European growth will slow and the European Central Bank will lower its main rate. Retail sales unexpectedly fell.
U.S. payrolls dropped by 80,000 in March. It was more than analyst forecast at 50,000 fewer jobs. The jobless rate increased to 5.1 percent from 4.8 percent. The Dollar Index decreased 0.2 percent to 72.093.
State Street Global Markets bought dollars on signs global financial distress is waning. Dollar purchases by institutional investors and the narrowing difference between TED spread, has encouraged the company to take a long position. A long position is a bet that an asset price will rise.
Commodities
Oil
Crude oil rose $2 a barrel as the dollar fell against the euro. The dollar weakened after a report showed the U.S. economy lost jobs in March, raising concern that the country is slipping into a recession. Investors moved money into commodities to hedge against inflation as returns outpaced those of financial markets.
Crude oil for May delivery rose $2.21 to $106.04 a barrel. Brent crude for May rose $1.28 to $103.80 a barrel.
Fires at refineries owned by Exxon Mobil Corp. in California and Finland along with a fault at a Royal Dutch Shell Plc plant in England bolstered gasoline and heating-oil futures prices.
Gasoline for May delivery rose 3.01 cents to $2.7545 a gallon.
U.S. payrolls shrank by 80,000, it is more than forecast. The jobless rate climbed to 5.1 percent from 4.8 percent.
OPEC members are scheduled to hold an informal meeting in Rome on April 20. The decline in U.S. consumption is being countered by demand from India and China.
OPEC production fell 85,000 barrels a day to an average 32.35 million barrels a day in March. Nigerian production fell 80,000 barrels to an average 1.96 million barrels a day.
Employers in the U.S. cut again in last month, signaling that the economic contraction is deepening and Fed will continue to lower interest rates. Payrolls shrank by 80,000, it is more than forecast. The jobless rate rose to 5.1 percent. Traders raised bets the Fed will cut rate half a point. Fed signaled increasing concern about the economy and credit markets as Ben S. Bernanke saying that the U.S. may enter a recession. Treasuries climbed, with 10-year note yields falling to 3.50 percent. Odds of a half-point rate cut at the Fed rose to 38 percent. Stocks dropped. Workers' average hourly wages were 3.6 percent higher than last year.
The job figures come a week before the spring meetings of IMF and G7 in Washington. IMF said that the U.S. economy has slowed to halt, it is hurting global growth prospects. IMF forecasts showed the fund characterized the U.S. financial crisis as worst as the Great Depression.
A weak economy and job losses are bad news for Republicans to hold onto the White House. In the four presidential elections that have closely followed a recession, the challenging party has won. Democratic presidential candidates called for an economic stimulus bill to give the economy a boost. Meanwhile Republican nominee called for lower taxes and streamlined regulations to create more jobs.
Factory payrolls shrank by 48,000 workers. The drop included a loss of 24,000 jobs in the auto manufacturing and parts industries. Economists had forecast a decline of 35,000 in manufacturing jobs. The walkout by workers at GM parts supplier over pay and benefits has idle half of GM's North American workforce. Ford Motor Co. may also cut more jobs in North America. Builders eliminated 51,000 jobs. Service industries added 13,000 workers. Retail payrolls decreased by 12,400. Financial firms payroll decreased by 5,000. It is mounting the collapse in subprime lending.
This year, financial firms have reduced staff in fixed income trading, securitization and investment banking. Lehman has eliminated 18 percent, Morgan Stanley has cut 6.2 percent, and Merrill Lynch & Co. has trimmed 4.5 percent.
The average work week lengthened to 33.8 hours from 33.7 hours. Average weekly hours worked by production workers increased to 41.3 from 41.2, while overtime increased to 4.1 hours from 4 hours. That brought average weekly earnings up by $3.47 to $603.67. Workers' average hourly wages rose to $17.86.
Economists are forecasting a prolonged recession. Fed state that the central bank is ready to respond to whatever situation evolves and cited considerable stress in markets. Policy makers must continue to act forcefully.
Stock Market
U.S. stocks gained as a rally in commodity producers and utilities overshadowed the biggest loss in jobs since 2003.
Exelon Corp. led gains in utilities as speculation that the Federal Reserve will slash interest rates pushed bond yields lower and made dividend-paying stocks more attractive. Exxon Mobil Corp. helped push energy shares higher as oil climbed above $105 a barrel. Freeport-McMoRan Copper & Gold Inc. advanced again after copper prices rose.
The Standard & Poor's 500 Index added 9.47 points to 1,378.78. The Dow Jones Industrial Average rose 52.84 to 12,678.87. The Nasdaq Composite Index increased 25.08 to 2,388.38.
Exelon rose $1.86 to $84.99. AES Corp. added 39 cents to $17.32. Utilities Index's dividend yield became more attractive as rates on Treasuries retreated following the jobs report. The 10-year note's yield fell to 3.49 percent.
Payrolls dropped by 80,000 that was more than initially reported. The jobless rate rose to 5.1 percent from 4.8 percent. Economists estimated payrolls would shrink by 50,000 workers and the unemployment rate rise to 5 percent.
Exxon added $1.11 to $89.21. Chevron Corp. increased 84 cents to $88.56. Crude oil for May delivery rose to $105.60 a barrel as the dollar fell against the euro, prompting investors to purchase commodities as a hedge against inflation.
Massey Energy Co. sparked a rally in coal producers after saying it expects higher metallurgical coal prices and will increase spending to capitalize on the demand.
Massey shares added $8.09 to $47.97. Peabody Energy Corp. rallied $2.38 to $57.57. Arch Coal Inc. gained $3.32 to $49.23. Freeport-McMoRan climbed $4.27 to $107.96 as copper jumped.
Mosaic Co. advanced $10.68 to $115.20. Third-quarter profit topped estimates because of rising crop-nutrient prices.
Allegheny Technologies Inc. surged $6.09 to $81.14. Investors purchased shares on speculation that the specialty-metal producer is a takeover target.
General Motors Corp. dropped 75 cents to $20.84. Investors pulled out cash to allow Delphi Corp. to emerge from bankruptcy. GM said it would take a bigger role in rescuing Delphi.
Currencies
The dollar fell against the euro and dropped versus the yen as a report showed the U.S. lost jobs, increasing concern the economy is falling into a recession.
An index tracking the dollar against major currencies fell as futures traders raised bets the Fed will cut rate by a half-percentage point. Currencies of commodity exporters led advances against the dollar as raw-materials prices rose.
The dollar fell to $1.5726 per euro. It dropped 0.6 percent after the jobs report was released. The dollar decreased to 101.79 yen. The euro traded at 160.07 yen.
Canada's dollar depreciated against major currencies as the country's job growth less than economists' forecasts. The unemployment rate rose.
Norway's krone rose against the dollar after crude oil increased to $105 as U.S. currency's decline encouraged investors move to commodities. Australia's dollar rose 0.6 percent and Brazil's real gained 0.7 percent.
Norway is one of the largest oil exporter. Exports of raw materials account for 17 percent of Australia's economy. Brazil's real gained 18.6 percent in a year, buoyed by a surge in exports of sugar, soybeans, iron ore and orange juice.
Analyst predict that U.S. currency will depreciate more, falling to $1.65 per euro and 80 yen this quarter.
The euro was headed for a decline against major currencies, on speculation European growth will slow and the European Central Bank will lower its main rate. Retail sales unexpectedly fell.
U.S. payrolls dropped by 80,000 in March. It was more than analyst forecast at 50,000 fewer jobs. The jobless rate increased to 5.1 percent from 4.8 percent. The Dollar Index decreased 0.2 percent to 72.093.
State Street Global Markets bought dollars on signs global financial distress is waning. Dollar purchases by institutional investors and the narrowing difference between TED spread, has encouraged the company to take a long position. A long position is a bet that an asset price will rise.
Commodities
Oil
Crude oil rose $2 a barrel as the dollar fell against the euro. The dollar weakened after a report showed the U.S. economy lost jobs in March, raising concern that the country is slipping into a recession. Investors moved money into commodities to hedge against inflation as returns outpaced those of financial markets.
Crude oil for May delivery rose $2.21 to $106.04 a barrel. Brent crude for May rose $1.28 to $103.80 a barrel.
Fires at refineries owned by Exxon Mobil Corp. in California and Finland along with a fault at a Royal Dutch Shell Plc plant in England bolstered gasoline and heating-oil futures prices.
Gasoline for May delivery rose 3.01 cents to $2.7545 a gallon.
U.S. payrolls shrank by 80,000, it is more than forecast. The jobless rate climbed to 5.1 percent from 4.8 percent.
OPEC members are scheduled to hold an informal meeting in Rome on April 20. The decline in U.S. consumption is being countered by demand from India and China.
OPEC production fell 85,000 barrels a day to an average 32.35 million barrels a day in March. Nigerian production fell 80,000 barrels to an average 1.96 million barrels a day.
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