Market Commentary Thursday, March 08, 2012 17:08 Hrs IST

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US stocks rise following private job data

Stocks recover part of prior session's losses

U.S. stocks recovered some of the prior day's losses and rose on Wednesday, 07 March 2012 helped by an upbeat report on jobs growth, a report the Federal Reserve could implement new bond buys if the economy flags and signs of progress on Greece's debt swap.

The Dow Jones Industrial Average ended up 78.18 points, or 0.6%, to 12,837.33. The Nasdaq Composite Index gained 25.37 points, or 0.9%, to 2,935.69. The S&P 500 Index climbed 9.27 points, or 0.7%, to 1,352.63.

Financials and industrials led the gainers on a sectoral basis. Utilities was the only one of 10 sectors to close lower. Bank of America shares finished up 4%, and led gains for 23 of 30 components.

Payroll-processor Automatic Data Processing in its latest report said U.S. companies added 216,000 employees to their employee rolls last month. Growth was in line with forecasts and instilled some confidence ahead of Friday's nonfarm-payrolls report from the Labor Department.

Stocks added to gains after a report the Federal Reserve, if it were to take new steps to boost the economy in the months ahead, would consider a type of bond-buying program designed to subdue worries about inflation.

For every stock declining, more than three gained on the New York Stock Exchange. Volume was moderate. On the NYSE, 801 million shares traded. NYSE composite volume topped 3.5 billion.

The dollar benefited from a flight to safety in the prior session, but it experienced some modest selling today. That left it to lose about 0.2% against a collection of competing currencies.

Among other economic data expected for the day, fourth quarter productivity and labor cost data both experienced some substantial revisions from the preliminary readings. The latest report indicated that productivity increased by 0.9%, which is an improvement over the 0.7% increase reported previously. Many had expected the revised reading to show an increase of 0.8%. Unit labor costs climbed 2.8%, which is far greater than the 1.2% increase featured in the preliminary reading and sharper than the 1.1% increase that had been widely anticipated.

Separate report showed that consumer credit climbed to $17.8 billion in February from a downwardly revised $16.3 billion in the prior month. Market had forecast, on average, a decline to $12.0 billion.

Gold and oil futures also added to gains after the report on the Fed's possible next steps. Oil for April delivery rose $1.46, or 1.4%, to $106.16 a barrel on the New York Mercantile Exchange, turning higher after a weekly supply report had inventory up less than expected. Gold for April delivery gained $11.80, or 0.7%, to $1,683.90 an ounce.

Tomorrow's all eyes will remian focussed on The Bank of England which will announce its latest decision on interest rates at 7:00 AM ET. The European Central Bank will follow at 7:45 AM ET. Domestic economic data is limited to the latest weekly jobless claims tally. Tomorrow also marks the deadline for the Greece's planned Bond swap.

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