Unemployment drop boosts stocks
Unemployment report showing a gain of 216,000 jobs provided a lift for stocks. With unemployment rate at a two-year low, the Dow rose 56 points.
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JPMorgan downgraded the consumer discretionary sector to "neutral" from "overweight," saying this "short-term" downgrade reflects the fact the sector has been "structurally weaker" for awhile. According to JPMorgan, economic momentum is slowing and the sector as a whole has high valuations.Skip to next paragraph
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JPMorgan also named stocks it liked in what it determined are the top 25 industries, as well as those it didn't. Among those on the favored list were the airlines Delta Airlines and UAL; health care companies Medco Health Solutions and Life Technologies Group; biotech companies Amgen andGilead, insurers Aetna and Cigna and Home Depot.
Office Depot dropped after the office supply retailer said it will restate its finances for the second and third quarters as well as for the full year. In addition, S&P equity cut its price target on the firm to $3.5 from $5.
Logitech International plunged more than 17 percent after the computer-mouse maker trimmed its 2011 sales and profit forecasts.
Semiconductors have especially been under pressure. Intel slipped after Macquaire Equities Research cut its near-term earnings estimates on the Dow component on concerns of "weaker-than-expected builds" in the first quarter. Rivals Nvidia and AMD also slid.
David Sokol’s surprise resignation as one of Berkshire Hathaway’s top executives continues to raise questions. Sokol's Lubrizol purchases, made before Warren Buffett company announced a proposed takeover of the chemicals company, have come under scrutiny.
In other economic news, the Institute for Supply Management's index fell slightly to 61.2 in March from 61.4 in February. Construction spending, meanwhile, fell 1.4 percent.
European shares closed higher after the U.S. jobs report. The pan-European FTSEurofirst 300 index rose about 1.5 percent. Portugal was in focus once against after its sold 1.65 billion euros in an extraordinary bond auction.Yields rose, but less than expected. Separately, the country has announced it will hold a general election on June 5.
The crisis in Japan continues. A Japanese newspaper reported Friday that Japan will take control of Tokyo Electric Power, the operator of a stricken nuclear plant, in the face of mounting public concerns over the crisis and a huge potential compensation bill, Reuters said.