US close: Technical resistance brakes rally, strategists very cautious

Wall Street gained at the end of the week on news that employers added more positions than forecast in February, although wages unexpectedly declined on the month, while some leading strategists and well-known investors sounded a very cautious note.

In an interview with Bloomberg TV, famed investor Jim Rogers said he was certain the US economy would fall into recession this year.

"It's been seven years, eight years since we had the last recession in the U.S., and normally, historically we have them every four to seven years for whatever reason—at least we always have," Rogers said.

In a similar vein, on Thursday HSBC strategists reportedly raised the weighting of cash in their recommended tactical asset allocation on a six-month view by 11 percentage points to 17%, telling clients that "cash is King in a world with debt overhangs".

On a three-year strategic horizon their cash position is zero.

The Dow Jones Industrial Average notched up a gain of 62.87 points or 0.37% to finish at 17,006, while the S&P 500 advanced 0.33% to 1999.99 - paring its year-to-date loss to 2.2% - and the Nasdaq Composite tacked another 0.20% to end the day at 4,717.02.

To take note of, gains in the S&P 500 were capped by technical resistance in the form of the gauge's 200-day moving average.

Total non-farm payrolls rose by 242,000 last month, beating analysts' expectations for a 195,000 increase, the Labor Department revealed. The unemployment rate was unchanged at 4.9% in February, as expected by markets.

While the non-farms number came in better than anticipated, average hourly earnings fell unexpectedly in February by 0.1% on the month to $25.35. Economists had pencilled in a 0.2% month-on-month rise in average hourly earnings in February following a 0.5% gain in January.

On the year, hourly earnings rose 2.2% in February compared to 2.5% year-on-year growth in January and analysts' forecasts for no change.

"The rebound in hiring was driven by the service-providing sector, which added 245k jobs on the month. Continued job gains of 200k or more per month are more than enough to keep the unemployment rate trending lower. We no longer see any substantive slack in labor markets.

"We continue to expect the FOMC to keep rates unchanged at its March meeting; however, consistent job growth and further improvement in other macroeconomic data could raise risks of a move as early as April. Our baseline forecast of rate hikes in June and December remains unchanged," Barclays's Jesse Hurwitz said in a research note sent to clients.

West Texas Intermediate crude oil futures continued rising, closing up by 0.54% to $38.93 per barrel, helping to fuel gains in the oil patch.

Baker Hughes's weekly US oil rig count revealed a drop of 8 active rigs targeting oil to 392, the least since December 2009.

The KBW index of bank stocks ended the session up by 0.83% to 65.49 points.

Markit's CDX North American High Yield Index, a gauge of credit-default swaps linked to the debt of 100 'junk-rated' firms, fell for a eighth day to the lowest level of the year, according to Bloomberg.

At the sector level, the best performance was seen in the following industrial groups: Non-ferrous metals: (6.92%), Paper (3.49%) and Forestry (3.49%).

As far as individual stocks are concerned, shares in Big Lots rallied after the retailer’s fourth quarter net income beat expectations.

Staples dropped after the office supplies retailer said it swung to a profit of $86m in the fourth quarter versus a loss of $260m the previous year.

Hewlett-Packard advanced after the company’s first quarter earnings and revenue released late on Thursday surpassed analysts’ forecasts.

Facebook slumped following a media report that the social network is set to pay millions of pounds more in UK tax after a major shake-up of its tax structure.

According to the BBC, profits from the majority of its advertising revenue initiated in Britain will now be taxed in the UK. The company will no longer route sales through Ireland for its largest advertisers, which include Tesco, Sainsbury’s, Unilever and WPP.

The yield on the benchmark 10-year US Treasury note rose four basis points to 1.87%.

S&P 500 - Risers
Chesapeake Energy Corp. (CHK) $5.08 +18.97%
Transocean Ltd. (RIG) $12.71 +17.36%
Ensco Plc. (ESV) $12.36 +13.08%
Murphy Oil Corp. (MUR) $23.70 +11.53%
Marathon Oil Corp. (MRO) $11.00 +10.33%
Freeport-McMoRan Inc (FCX) $9.74 +6.92%
Southwestern Energy Co. (SWN) $7.83 +6.68%
Genworth Financial Inc. (GNW) $2.88 +6.67%
ConocoPhillips (COP) $41.12 +6.64%
Apache Corp. (APA) $48.04 +6.54%

S&P 500 - Fallers
Symantec Corp. (SYMC) $16.62 -19.01%
H&R Block Inc. (HRB) $27.76 -15.62%
EQT Corp. (EQT) $56.34 -5.60%
GameStop Corp. (GME) $31.23 -4.52%
CF Industries Holdings Inc. (CF) $34.59 -4.42%
Tenet Healthcare Corp. (THC) $27.06 -3.67%
Wynn Resorts Ltd. (WYNN) $85.44 -3.29%
Cabot Oil & Gas Corp. (COG) $21.47 -3.16%
FMC Technologies Inc. (FTI) $25.68 -2.91%
Staples Inc. (SPLS) $9.60 -2.74%

Dow Jones I.A - Risers
E.I. du Pont de Nemours and Co. (DD) $63.18 +2.05%
Caterpillar Inc. (CAT) $72.84 +1.52%
Apple Inc. (AAPL) $103.01 +1.49%
Boeing Co. (BA) $121.07 +1.22%
Goldman Sachs Group Inc. (GS) $156.84 +0.97%
Wal-Mart Stores Inc. (WMT) $66.78 +0.97%
United Technologies Corp. (UTX) $97.00 +0.93%
General Electric Co. (GE) $30.46 +0.79%
Procter & Gamble Co. (PG) $83.49 +0.78%
Travelers Company Inc. (TRV) $110.40 +0.55%

Dow Jones I.A - Fallers
Home Depot Inc. (HD) $125.56 -0.98%
Microsoft Corp. (MSFT) $52.03 -0.61%
Pfizer Inc. (PFE) $29.71 -0.60%
Walt Disney Co. (DIS) $98.48 -0.34%
Nike Inc. (NKE) $61.26 -0.34%
Cisco Systems Inc. (CSCO) $26.80 -0.26%
Verizon Communications Inc. (VZ) $51.81 -0.15%
Johnson & Johnson (JNJ) $106.50 -0.14%
Exxon Mobil Corp. (XOM) $82.29 -0.13%
Merck & Co. Inc. (MRK) $52.08 -0.04%