By Dan Strumpf
U.S. stocks rose, rebounding from an early loss, in the first
trading session following the release of March's disappointing jobs
report.
The Dow Jones Industrial Average gained 122 points, or 0.7%, to
17885, bouncing back from a loss of 116 points shortly after the
opening bell. The S&P 500 gained 14 points, or 0.7%, to 2081.
The Nasdaq Composite added 25 points, or 0.5%, to 4912.
The Labor Department on Friday said U.S. employers added 126,000
jobs in March, the weakest pace of hiring in 15 months. With the
U.S. stock market closed Friday for the Good Friday holiday, Monday
was the first chance for investors in stocks to react to the
report.
Some of Monday's gains were driven by investors putting money to
work following last week's declines, traders said. Trading activity
was relatively subdued, however, with many overseas markets still
closed Monday.
"You saw some tentative trading last week that I think had some
people sitting on their hands a bit, sitting in cash," said Justin
Wiggs, managing director of equity trading at Stifel Nicolaus. "It
seems like guys are putting cash to work today."
Still, the labor report for March was the latest in a series of
indicators to show economic growth has slowed in recent months.
That is giving investors pause ahead of what is shaping up to be a
weak first-quarter earnings season, which unofficially begins this
week when Alcoa Inc. reports results after the close of trading
Wednesday.
Investors are contending with several forces working against
corporate bottom lines. A sharply stronger dollar is reducing
profits at large, multinational companies. At the same time, energy
companies continue to deal with the hit to their earnings from the
slump in U.S. oil prices. In all, analysts expect earnings at
S&P 500 companies to decline 4.8% from a year ago, according to
FactSet.
"We've been seeing more research coming out about negative
earnings for the first quarter," said Hayes Miller, head of
multi-asset North America at Baring Asset Management, which manages
$42 billion. "There's beginning to be some questioning about what
we're paying for."
Mr. Miller also said signs of wage growth will make it difficult
for many large companies to continue expanding profit margins. He
said he recently boosted his holdings of European and Japanese
stocks, at the expense of U.S. shares.
"The stronger economy is leading to stronger wages, and that
should spell the end of peak profit margins," he said.
Energy stocks rose alongside oil prices, with the S&P 500
Energy Index gaining 1.7%. Utilities in the S&P 500 rallied
1.6%.
In other markets, Treasury prices fell Monday, lifting the
10-year yield to 1.868% from 1.840% on Friday. Gold futures gained
1.4% to $1217.30 an ounce. Crude-oil futures gained 1.9% to $50.05
a barrel.
This year has been an uneven one for U.S. stocks. The Dow has
gained 0.4% for the year, while the S&P 500 has added 1.1%. The
choppy action in stocks so far this year is consistent with a view
held by many investors that stock gains in 2015 will be smaller
than in previous years.
On the list of concerns for equity investors is the timing of an
eventual increase in interest rates by the Federal Reserve. The Fed
has emphasized that it is in no rush to raise short-term rates,
which have been held near zero since December 2008.
Meanwhile, shares of Hudson City Bancorp Inc. fell 5.7% after
the company said its planned merger with M&T Bank Corp. has
been delayed again and won't close by the previously announced date
of May 1. M&T's shares lost 2.4%.
Tesla Motors Inc. shares jumped 7.7% after the car maker said it
delivered 10,030 vehicles in the first quarter--500 vehicles above
its initial forecast and 55% more than the same period a year
earlier.
Ventas Inc. shares rose 5.1% after the company agreed to buy
Ardent Medical Services Inc. for $1.75 billion in cash, and said it
would spin off its skilled nursing facilities into an independent
real-estate investment trust.
Several stock markets in Asia and Europe were closed Monday.
Write to Dan Strumpf at daniel.strumpf@wsj.com
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