Exchange traded funds (ETFs) closed broadly higher Wednesday, sending the Dow Jones Industrial Average to a nearly six-week closing high, helped by enthusiasm for a private-sector report on March jobs growth and a rally in telecom stocks.
- U.S. private employers added more than 200,000 jobs in March while planned layoffs fell; underscoring expectations that momentum in the labor market will help underpin the economic recovery. The ADP Employer Services report on Wednesday showed that U.S. private employers added 201,000 jobs in March, largely in line with expectations for a gain of 203,000 jobs. The slow recovery in the jobs market has been one of the biggest hurdles to a sustainable economic recovery, but recent data has raised optimism that improvement in employment is strengthening. The SPDR Dow Jones Industrial Average ETF (NYSEArca: DIA) rose 0.6% today.
- Strong gains in the Internet sector powered tech stocks on Wednesday, as Amazon.com got a boost from a bullish Morgan Stanley report and China-based Internet firm Qihoo 360 Technology soared in its initial public offering. Amazon’s (NYSE: AMZN) stock jumped 2.75% after Morgan Stanley reiterated its overweight rating and raised its price target to $225 from $205. The broker believes Amazon will benefit from an accelerating shift in the specialty retail market to online purchases. Also highlighting tech action was the strong debut of Qihoo 360 Technology which priced above its offering range at $14.50 and watched its stock more than double to close at $34. The China-based Internet company had offered to sell 12.1 million shares at an initial range of $10.50 to $12.50. The Internet HOLDRs ETF (AMEX: HHH) ended Wednesday 2.02% higher.
- Gold futures quit a four-session losing streak Wednesday as demand for the precious metal as a hedge against Euro-zone debt worries and fighting in Libya brought buyers in at recently lowered prices. Gold for June delivery ended up 0.5%, at $1424.90 an ounce. The precious metal touched a high of $1,431.70 an ounce early in the day, then dove to a slight loss and an intraday low of $1,413.10 an ounce before rebounding. Adam Klopfenstein, a senior market strategist at Lind-Waldock in Chicago, said many of the common themes pushing up gold still apply, such as uncertainty about the Middle East and the impact of crippled nuclear plants in Japan. The Market Vectors Junior Gold Miners ETF (NYSEArca: GDXJ) closed up 2.36% today.
- European shares ended higher Wednesday, led by gains for the industrial-oriented German market, though peripheral markets had a mixed session due to ongoing worries over sovereign debt. Signs that Japanese manufacturers are starting to resume production helped lift European manufacturing and industrial stocks, which dominate the German market, noted Heino Ruland, strategist at Ruland Research. But while most markets were stronger, Ruland said there are clear signs of concern over European sovereign debt and unrest in the Middle East. “There’s still a high degree of uncertainty because volumes are still extremely low. To a degree it’s an absence of sellers that’s driving markets higher,” Ruland said. The ProShares Ultra MSCI Europe ETF (NYSEArca: UPV) gained 2.35% on Wednesday.
For disclosure, Tom Lydon’s clients own GDXJ.
Gregory A. Clay contributed to this article
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