MARKET ATTEMPTS REBOUND AFTER EARLY SELLOFF -- BOND YIELDS PLUNGE ON WEAK JOBS REPORT -- WEAKER DOLLAR BOOSTS ENERGY AND GOLD STOCKS
BOND YIELDS PLUNGE TO EIGHT-MONTH LOW... This morning's weak February job report was a shocker. The number of new jobs came in at 21K versus expectations for 125K new jobs. As a result of that very weak report, the price on the 10-year T-note soared 50/32 and its yield plunged to the lowest level since last June. The dramatic plunge in bond yields is seen in Chart 1. That drop in yields carries important implications for several markets. First, it's good for interest-rate sensitive stocks. It supports recent moves to new highs in financials, homebuilders, utilities, and REITs. Plunging rates, however, are pushing the dollar sharply lower today. That's causing buying in gold and energy shares. Gold jumped $6 this morning to $399 and crude oil rose 60 cents to a new high for the year. Stocks are trying to recover from an early morning selloff led by technology stocks and the Semiconductor (SOX) Index in particular. At one point this morning, the S&P 500 touched a new intra-day high for the year before weakening again. Today's closing prices will tell us a lot about the resiliency of the stock market, and whether upside momentum experienced earlier in the week can be maintained.
Chart 1
