Stocks Push Higher After ISM Report
Stocks advanced Wednesday as reports on the services sector and jobs came in better than expected.
The Dow was up about 30 points, led by Caterpillar , GE and Alcoa .
At the bottom of the Dow pack were Pfizer, Verizon and McDonald's.
The ISM said its gauge of the services sector rose to 53in February, its highest since December 2007. Economists had expected the gauge to hold at 50.5, where it was in January. Services account for 80 percent of all U.S. economic activity.
Meanwhile, ADP reported the private sector shed 20,000 jobs in February, less than the upwardly-revised 60,000 loss in January. At the same time, outplacement firm Challenger, Gray & Christmas reported that planned layoffs dropped to 42,090, their lowest level in four years.
The jobs reports were an encouraging sign ahead of Friday's employment report from the government, which is currently expected to show 50,000 jobs were dropped from payrolls last month and the unemployment rate ticked up to 9.8 percent.
White House economic advisor Larry Summers cautioned yesterday that recent winter storms in the Northeast are likely to distort the numbers.
”In past blizzards, those statistics have been distorted by 100,000 to 200,000 jobs,” Summers said on "Fast Money" yesterday.
In Washington, the Senate approved a bill to resume aid to unemployed Americans, after a dispute with Senator Jim Bunning (R-KY) that had held the bill up was resolved.
Still to come: At 2 pm ET, the Federal Reserve issues its Beige Book, the region-by-region assessment of the nation's economy.
The parade of Fed speakers continues today: Philadelphia Fed President Charles Plosser, Boston Fed President Eric Rosengren and Dallas Fed President Richard Fisher all spoke this morning. At 1 pm, both Atlanta Fed President Dennis Lockhart and Richmond Fed President Jeffrey Lacker will give speeches in New York.
Also giving support to the market today was news that Greece's cabinet has approved a sweeping new plan to rein in its budget deficit that includes tax hikes and spending cuts.
Pfizer stock took a hit after the drug maker said an Alzheimer's drug it was developing with Medivationfailed to reach goalsin a late-stage study.
Goldman Sachs shares declined after Rochdale Securities analyst Dick Bove slashed his forecast for the brokerage, citing weak trading activity.
"It looked as if it was going to be a very strong quarter for Goldman Sachs and other companies in the sector," Bove said. "All of a sudden, when the Greece situation developed toward the end of January ... then basically, trading just dried up. Sector by sector you saw a significant decline in trading activity."
As a result, Bove said his optimistic estimates "had to go away."
Netflix skidded after Bank of America-Merrill Lynch cut the stock two notches to underperform. BofA-Merrill said the company would have to nearly triple its subscriber base to justify its current stock price.
On the earnings front, warehouse clubs Costco and BJ's Wholesale missed their targets, while close-out retailer Big Lots , which specializes in sales of excess inventory, beat expectations.
BJ's issued an outlook below consensus, while Big Lots offered guidance that was significantly above forecasts.
Meanwhile, shares of Ethan Allen jumped after the furniture chain reported improved traffic and said year-to-date orders are up 25 percent from a year earlier.
And shares of DineEquity jumped more than 10 percent after the company, which operates the Applebee's and IHOP chains, projected an improvement in 2010 restaurant sales.
More recall news: Japan's Nissan is recalling 540,000 vehicles, to deal with potential defects in break pedal pins and fuel gauge components. The company says no accidents or injuries have been reported due to these issues.
Ford shares continued to rally a day after reporting its sales jumped 43 percent last month, marking the first time the company has outsold GM in almost 12 years.
Still to Come:
WEDNESDAY: Fed's beige book report
THURSDAY: Citi's Pandit testifies at COP hearing; retailers report chain-store sales; BOE, ECB rate decisions; weekly jobless claims; pending-home sales; factory orders; Fed's Bullard, Evans speak; Earnings from Anheuser-Busch and Marvell Tech
FRIDAY: February jobs report; consumer credit
Send comments to firstname.lastname@example.org.