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Caution follows relief on Wall Street

Wednesday, March 05, 2014 - 02:23

March 5 - Summary: Tepid jobs, services data coupled with the situation in Ukraine leave investors guessing; Honeywell lays out aggressive long-term growth forecasts; Target security officer steps down after data breach. Conway G. Gittens reports.

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U.S. investors did not know what to do - unimpressed with soft data on jobs and the services sector, while keeping an eye on Ukraine. The Dow, the S&P 500, and the Nasdaq barely moved, though the S&P 500 briefly touched an intra-day record. In economic data, a report from payrolls processor ADP showed private firms hired only 139,000 people in February, with January's number revised down sharply. Meanwhile, a separate report showed growth in the massive services sector down to a four-year low. The Federal Reserve's latest summary of economic conditions, known as the Beige Book, said harsh winter hurt consumer spending and slowed economic output in recent weeks. The survey suggests weather will give the Fed the cover it needs to keep on dialing back its stimulus. But stocks are still attractive in this mediocre economic environment, says Milton Ezrati, senior economist and market strategist at Lord Abbett. SOUNDBITE: MILTON EZRATI, SENIOR ECONOMIST AND MARKET STRATEGIST, LORD ABBETT (ENGLISH) SAYING: "It's not as drop-dead gorgeous as it was a year ago or two years ago, but it's still pretty attractively valued. We don't really need a lot of good news to get the market to move up to realize this value. We need mediocre news, avoid the worst fears. And, if Ukraine holds out, we will avoid the worst fears, and this market can move up. Eventually, however, it will realize the value, and we will need genuinely good news to continue the rally." In company news: Honeywell forecast a sales increase to more than $50 billion by 2018 and plans to spend $10 billion on acquisitions. The company sees earnings grow at a double-digit pace in percentage terms over the next five years. The stock, however, just as flat as the broader market. Target's chief information officer resigned. The retailer is working on changing its information security practices after a massive data breach late last year. Shares of the discount retailer were down more than a percent. Now to Ukraine. The U.N.'s special envoy was forced to abandon a mission to Crimea after being stopped by armed men and besieged in a cafe by a hostile crowd shouting "Russia! Russia!" Meanwhile, the European Union offered Ukraine 11 billion euros in financial aid if Kiev reaches a deal with the International Monetary Fund. European shares were steady to the down side.

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Caution follows relief on Wall Street

Wednesday, March 05, 2014 - 02:23