Quiet day for stocks as traders wait for key data on the jobs market Friday. Following strong gains on Tuesday, stocks have shown little movement today. Rising oil prices and a stronger yen have kept the bulls at bay so far. However, the Fed Beige Book could affect prices if it shows the economy is slowing more than expected. The ADP Employment report confirmed the view that jobs growth in February was weak.
Friday's employment report will be a key to for stocks going forward. Traders want to see how strong the jobs market is and if inflation pressures are growing for labor. Expectations are for nonfarm payrolls to rise by 100,000, but if the ADP report is accurate, this figure might be too bullish. The ADP report showed that just 57,000 private payroll jobs were added during the month. When we add the 20,000 or so that come from the government, it still leaves us well short of expectations.
Crude inventory levels fell by 4.8 million barrels for the week ending March 2, which was a larger drop than expected. Both distillates and gasoline reserves also declined by 1.3 million barrels and 3.8 million barrels respectively. This news has pushed oil prices higher on the session with a barrel of crude up about a dollar to $61.70. Of course, gains in oil prices have benefited the energy sector with ExxonMobil (XOM) up one percent.
The housing sector has been in the spotlight for some time now, mostly for negative reasons. Home builder Toll Brothers (TOL) is seeing a gain of more than two percent after Wednesday after the company stated it will have worked through excess inventory within the next four to five months.
Overall, volumes are not nearly as strong today as they have been, but this could change come after the Beige Book report this afternoon. However, traders might just want to take a break after a lot of volatility, especially ahead of the jobs report on Friday. So far, the 12,000 level for the Dow ($INDU) is holding and the bulls hope this area can form a base for a new rally in the near future.
Senior Staff Writer & Options Strategist
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