Stocks Extend Winning Streak After Lackluster Session - U.S. Commentary

(RTTNews) - Stocks fluctuated over the course of the trading day on Friday but once again managed to end the day moderately higher. With the gains on the day, the major averages reached their best closing levels in about two months.

The major averages finished the session in positive territory. The Dow rose 62.87 points or 0.4 percent to 17,006.77, the Nasdaq edged up 9.60 points or 0.2 percent and the S&P 500 climbed 6.59 points or 0.3 percent to 1,999.99.

With the gains on the day, the major averages closed higher for the third straight week. The Dow jumped by 2.2 percent. while the Nasdaq and the S&P 500 surged up by 2.8 percent and 2.7 percent, respectively.

The higher close on Wall Street was partly due to a sharp increase by the price of crude oil, which has recently been a key driver of the markets.

Crude for April delivery jumped $1.35 to a two-month high of $35.92 a barrel after slipping $0.09 to $34.57 a barrel on Thursday.

Traders were also reacting to the Labor Department's closely watched monthly jobs report, which showed a jump in employment but a modest drop in wages.

The report said total non-farm employment jumped by 242,000 jobs in February compared to economist estimates for an increase of about 190,000 jobs.

Job growth in December and January was also upwardly revised to 271,000 and 172,000, respectively, reflecting a net upward revision of 30,000 jobs.

Meanwhile, the Labor Department also said average hourly employee earnings dipped 3 cents or 0.1 percent to $25.35. Earnings were up by 2.2 percent year-over-year.

Analysts have recently been focused on wages amid ongoing uncertainty about the outlook for the Federal Reserve's monetary policy.

"Overall, it's clear that labor market conditions are still strong," said Paul Ashworth, Chief U.S. Economist at Capital Economics. "The lack of a more marked pick-up in wage growth is the only missing element."

"But as far as the Fed is concerned, it is already seeing a clear acceleration in core price inflation, so it can't delay raising interest rates for much longer," he added. "A June rate hike is coming."

The jobs report has largely overshadowed a separate report from the Commerce Department showing that the U.S. trade deficit widened in January.

Sector News

Extending a recent rally, steel stocks showed a substantial move to the upside on the day. The NYSE Arca Steel Index surged up by 3.7 percent to its best closing level in four months.

Within the steel sector, Ryerson (RYI), Gerdau (GGB), and Brazil's CSN (SID) turned in some of the best performances.

Energy stocks also saw considerable strength, moving higher along with the price of crude oil. The NYSE Arca Natural Gas Index and the Philadelphia Oil Service Index surged up by 3.2 percent and 3.1 percent, respectively, and the NYSE Arca Oil & Gas Index is jumped by 1.4 percent.

Tobacco, trucking, and chemical stocks also saw considerable strength, while weakness was visible among electronic storage and gold stocks.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Friday. Japan's Nikkei 225 Index ended the day up by 0.3 percent, while Hong Kong's Hang Seng Index jumped by 1.2 percent.

The major European markets also moved to the upside on the day. While the U.K.'s FTSE 100 Index surged up by 1.1 percent, the French CAC 40 Index and the German DAX Index advanced by 0.9 percent and 0.7 percent, respectively.

In the bond market, treasuries came under pressure on the heels of the monthly jobs report. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, climbed 5.3 basis points to 1.883 percent.

Looking Ahead

Next week's trading activity may be somewhat subdued amid a lack of major U.S. economic data, with traders looking ahead to the following week's Federal Reserve meeting.