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Market Update

Mild Optimism on Wall Street After Payrolls Data and Bank Stress Test

Author: Nichole Harper
Last Update: 11:39 AM ET March 08 2013

11:35 AM New York – Stocks in New York searched for direction after employers added more-than-expected 236,000 jobs and jobless rate declined to 7.7%. Housing sector strength also contributed to the jobs increase in financial services and other sectors. Wholesale inventories increased 1.2% in January.

Stocks in New York traded higher as employers added more than expected workers and jobless rate fell to the lowest level since December 2008.

Federal Reserve said 17 of 18 largest banks could weather a sharp decline in economy with adequate capital after a stress test.

Employers added more-than-expected 236,000 jobs in the month and partly on the strength in the housing market.

The Labor Department said jobless rate fell to 7.7% from 7.9% in January, the lowest since the last month in 2008 when the unemployment rate was 7.3%.

The growth in employment was led by the gains of 48,000 in construction sector, the single largest monthly increase since March 2007.

The strength in the real estate sector also contributed to the gains in other segments of the economy. Employment in financial services increased after real estate brokerage and leasing firms added 9,000 net new jobs.

Government jobs declined 10,000 and state and local branches cut staff but the federal payrolls were flat.

The government agency also revised January employment growth to 157,000 and December payrolls increase was revised up to 219,000 from 196,000.

In a separate report, Commerce Department said inventories at U.S. wholesale businesses increased more than expected in January.

Inventories increased 1.2%, the biggest increase since December 2011. Stockpile of durable goods increased 1.1% and sales of durable goods expanded 0.7% in December. The value of unsold non-durable goods increased 1.2% and sales declined 2.1%.

In Asian and Australian stocks opened flat in a quiet trading and picked up steam after China released its February trade data.

Exports increased 21.8% in the month and imports declined to a 13-month low by 15.2%. The surprise bounce in exports was driven by strongest export increase to the U.S. in a year and 18-month high to the euro zone.

In Tokyo, the Nikkei extended gains to a new 5-year high after the government revised economic growth in the final quarter to an increase of 0.2% from the previous estimate of contraction of 0.4%.

Stocks in Review

Banks in New York traded mixed after most banks passed Fed’s stress test.

Citigroup increased 2%, JP Morgan declined 1.5% and Morgan Stanley fell 1.7%.

McDonald’s gained 1.3% after the fast food restaurant chain said same store sales at stores open at least a year declined less than expected.

Pandora soared 17% after the Internet radio service provider said revenues in the last quarter ending in Jan increased to $125.1 million and excluding certain items loss per share was 4 cents.

The company also said chairman and chief executive Joe Kennedy resigned over the differences with the board on the future direction of the company.

Sources: Data collected by 123jump.com and Ticker.com from company press releases, filings and corporate websites. Market data: BATS Exchange. Inc