\n\tBy Greg Peel<\/p>\n
\n\tThe Dow closed up 50 points, or 0.4%, while the S&P gained 0.3% to 1556 and the Nasdaq<\/span> added 0.3%.<\/p>\n \n\tWall Street opened slightly lower from the bell last night as traders weighed up the weekend’s data out of China indicating rising inflation and slowing sales and production growth. But in the current market, stock prices do not come off for too long. The drop was short lived, and once again indices grafted their way higher over the session.<\/p>\n \n\tThe Dow Jones Industrial Average of 30 top stocks continues into blue sky territory and is one for the headlines, but the Dow is more of a historical curiosity and Wall Street traders and fund managers concentrate more on the broad market S&P 500. It closed at 1556 last night, only 9 points shy of its 2007 all-time high, and there appears to be nothing in the way of an impediment at this stage for this index to hit blue sky.<\/p>\n \n\tAs to what happens when it does get there, we’ll have to see. There is so much talk of a pullback around that we’re not likely to get one, and dip-buyers seem only to allow about a 20 point fall in the Dow before barrelling<\/span> in. Only when pullback talk subsides will this market correct as it should.<\/p>\n \n\tFriday night’s surprise jobs number provides somewhat of a conundrum. If the US economy is adding jobs, that’s good. But if the unemployment rate is falling towards the Fed’s 6.5% QE exit target, that’s not so good. There is not sufficient confidence in the US economy to continue recovering without ongoing monetary support.<\/p>\n \n\tThe US unemployment rate fell 0.2ppt to 7.7% in February from 7.9% in January. If this trend is maintained, Bernanke will start rolling back QE in six months. But in September the rate was 7.8%, so we’ve only fallen 0.1ppt in the last six months. Much depends on the participation rate. If an improving employment outlook encourages more Americans to start looking for work again, the unemployment rate can just as easily go backwards even as jobs are added.<\/p>\n \n\tEither way, Wall Street remains just a little nervous that too much positive information brings a QE exit that little bit closer. China is a concern, although we need to get past the New Year numbers, and Italy still doesn’t have a government.<\/p>\n \n\tAfter a strong rally last week, the US dollar index slipped 0.2% last night to 82.60. The Aussie is up equivalently to US$1.0273 and gold continues to do little, rising US$2.30 to US$1581.10\/oz.<\/p>\n \n\tBase metals were mixed on small moves last night, while the oils dipped slightly, with Brent down US39c<\/span> to US$110.22\/bbl<\/span> and West Texas down US10c<\/span> to US$91.85\/bbl<\/span>. Iron ore nevertheless continues to tumble, falling US$2.20 yesterday to US$141.10\/t.<\/p>\n \n\tThe SPI<\/span> Overnight rose 7 points.<\/p>\n \n\tThe local economic highlight today will be the NAB business confidence survey for February. \n\tAll overnight and intraday prices, average prices, currency conversions and charts for stock indices, currencies, commodities, bonds, VIX<\/span> and more available in the FNArena Cockpit. Click here<\/a>. (Subscribers can access prices in the Cockpit.)<\/em><\/p>\n \n\tAll paying members at FNArena are being reminded they can set an email alert specifically for The Overnight Report. Go to Portfolio and Alerts in the Cockpit and tick the box in front of The Overnight Report. You will receive an email alert every time a new Overnight Report has been published on the website.<\/em><\/p>\n
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