(Repeats column initially published late Friday)
By Caroline Valetkevitch
NEW YORK, March 30 If hiring picked up in March
at a healthy pace, that could convince U.S. stock investors this
week that the economy's recent setbacks caused by the weather
were only temporary.
Friday's monthly jobs report, the most widely watched U.S.
economic indicator, is expected to show that employers added
200,000 jobs in March to nonfarm payrolls, according to a
Reuters poll of economists. [ ]
The rebound in hiring started last month despite the icy
weather. Employers added 175,000 jobs to nonfarm payrolls in
February after creating 129,000 new positions in January.
Wall Street will get more data on the broader economy this
week as well.
The Institute for Supply Management will release its
national surveys for March on the manufacturing and services
sectors, which are expected to show improvement from the
previous month as well.
Rosier data could confirm for investors that recent weakness
in economic data was caused by the winter's harsh weather,
suggesting the U.S. economy's uptrend is intact.
Improvement in the labor market, along with a pickup in the
manufacturing and services sectors, could also bolster the case
for the Federal Reserve's scaling back of economic stimulus and
put more focus on the timing of when the central bank will begin
raising interest rates.
Job growth would be a plus for the market, which has
suffered a bout of volatility as some of the most high-flying
shares, including biotechs, tumbled in the past week.
"We potentially could have a big positive surprise. The
polar vortex is over, and I believe we could get a snapback in
payroll numbers that is significantly better than expected,"
said Doug Cote, chief market strategist at ING U.S. Investment
Management in New York.
Car sales for March will be released this week, along with
ADP's private-sector payrolls report for March and data on the
U.S. international trade deficit for February.
Investors are anxious to get a look at more trade data after
China's weak export numbers earlier this month underscored
worries that the world's second-largest economy is slowing.
TECHS MAY EXTEND SLIDE
The recent selloff in biotech and other recent big gainers
could persist, strategists said, although so far it has not
eroded the market's bull run. Investors have been putting money
instead into utilities and other sectors.
The Nasdaq biotechnology index fell 7 percent for the
week. With just one trading day left in March, the Nasdaq
biotech index was down about 13 percent for the month at
"There's definitely been rotation out of tech in terms of
asset flows, and energy and utilities have been growing," said
John Kosar, director of research with Asbury Research in
For the past week, the S&P utilities sector index
rose 1.2 percent and the S&P energy index climbed 2.5
In another potential headwind for the stock market, Moody's
Investor Service put Russia's government bond rating on review
for a downgrade late Friday as the conflict with Ukraine weighs
on the country's economic outlook.
FIRST-QUARTER WARNINGS DOMINATE
More U.S. companies could issue outlooks for the coming
reporting period in the week ahead. So far, negative outlooks
have surpassed positive ones from S&P 500 companies by a ratio
of 6.9 to 1 for the first quarter, Thomson Reuters data showed.
That's still lower than the ratio for the fourth quarter,
but the high number of negative outlooks has driven profit
estimates down for the first quarter.
S&P 500 first-quarter earnings growth is now expected to
increase just 2.1 percent, down sharply from a Jan. 1 growth
estimate of 7.6 percent, the Thomson Reuters data showed.
Among companies that have already reported earnings, FedEx
said severe winter weather hurt results. FedEx cut its
fiscal-year profit forecast.
Monsanto is due to report earnings this week, along
with Micron Technology. But the earnings season won't get
under way until April 8, when Alcoa is scheduled to
"You'll start to have companies giving you an indication of
how the quarter looked," said Dan Veru, chief investment officer
of Palisade Capital Management LLC in Fort Lee, New Jersey,
which oversees $4 billion.
(Wall St Week Ahead runs every Sunday. Questions or comments
on this column can be emailed to:
(Reporting by Caroline Valetkevitch; Editing by Jan Paschal;
For the U.S. stock report, click on )