STOCKS RALLY ON STRONG JOBS REPORT WITH SMALLER WAGE GAIN -- S&P 500 CLEARS 50-DAY AVERAGE -- NASDAQ 100 HITS NEW RECORD -- SEMICONDUCTOR ISHARES ARE LEADING THE QQQ INTO RECORD TERRITORY -- LAM RESEARCH AND INTEL HIT NEW RECORDS
STRONG EMPLOYMENT REPORT BOOSTS STOCKS... A blockbuster employment report this morning is giving a big boost to stocks which were already in rally mode going into the report on easing tariff concerns from yesterday afternoon. U.S. employers added 313,000 jobs in February which was way above estimates and the biggest gain in nearly two years. The labor participation rate rose to 63% which was its biggest monthly gain since 2010. Stocks were also encouraged by a drop in February wage gains to 2.6% from January's gain of 2.9% (which was revised down to 2.8%). A lot more jobs without the inflationary threat from higher wages is a good combination for stock traders. And they're certainly acting that way. Stocks are trading sharply higher across the board. And they're breaking through some important resistance barriers. Chart 1 shows the S&P 500 gapping above its 50-day moving average. It now appears headed for a test of its recent peak near 2789. Small caps have already cleared that resistance level. An even more positive development is coming in the Nasdaq market. Chart 2 shows the PowerShares QQQ (Nasdaq 100 Index) breaking out to a record high. The QQQ is being led higher by technology stocks, and semiconductors in particular. The Technology SPDR (XLK) is trading at an all-time high today. It's the first sector ETF to do that. The XLK and QQQ are following semiconductors into record territory. That's a good sign for them and the rest of the market.
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Chart 1
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Chart 2
SEMICONDUCTOR ISHARES HIT NEW RECORD -- SO DO LAM RESEARCH AND INTEL... Yesterday's message showed the Semiconductor (SOX) Index hitting a record high and suggested that the Nasdaq would soon follow suit. Both Nasdaq indexes are doing that today. And chip stocks continue to lead the technology-inspired rally. Chart 3 shows the PHLX Semiconductor iShares (SOXX) surging to another record high today. The SOXX hit a new record earlier in the week and is leading the market higher again today. Lam Research (LRCX) is the day's biggest percentage gainer in the QQQ. Chart 4 shows that chip leader breaking out to a new record. Intel (INTC) is the biggest percentage gainer in the Dow. Chart 5 shows that chip bellwether hitting a new record as well. The ability of the Nasdaq market to hit a new high suggests that the recent correction has probably bottomed. It's hard to imagine the stock market suffering another downleg while Nasdaq indexes are setting new records. Ten market sectors are in the green today, with utilities being the only loser. They're being hurt by rising bond yields. Bonds are being sold as stocks rally. Sector leaders are energy, financials, industrials, technology, and materials. The VIX index has fallen to 15 which is the lowest level in a month. Foreign stocks are being led higher by emerging markets. EM markets are being led higher by Brazil, China, Mexico, and South Korea.
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