Morning Update

Fewer Jobs Lost, Stocks Advance

Stocks are trading higher after fewer-than-expected jobs were lost, China’s Premier reaffirmed growth while targeting property speculation, and investors continue to be constructive on news from Greece yesterday on a successful bond auction that saw demand nearly three times higher than offered, ahead of a meeting with Germany’s Chancellor Merkel later today. Equity news in the US is light, with Marvell Technology beating consensus earnings estimates but falling short of some expectations and Apple announcing the availability date for the iPad. Treasuries are lower on the jobs data. Stocks in Asia closed higher and Europe is extending early gains.

As of 8:43 a.m. ET, the March S&P 500 Index Globex future is 6 points above fair value, the Nasdaq 100 Index is 10 points above fair value, and the DJIA is 46 points above fair value. Crude oil is up $0.87 at $81.08 per barrel, and the Bloomberg gold spot price is up $1.64 at $1,133.84 per ounce. Elsewhere, the Dollar Index—a comparison of the US dollar to six major world currencies—is up 0.3% to 80.84.

Marvell Technology (MRVL $20) reported adjusted 4Q EPS of $0.40, higher than the forecast the company gave in December of a range of $0.33-0.39 per share and analyst estimates of $0.37 per share. Revenues came in at $842.5 million, within the range the company forecast of $820-850 million, and near the analyst average of $842.8 million. The semiconductor company, whose products include processors for the BlackBerry phone, said that they are pleased with their progress, but mindful of the challenging economic environment they operate in, focusing on aspects of the business they can control and influence.

Apple Inc (AAPL $211) announced that the iPad would be available in the US on April 3 and pre-orders for the product will start on March 12. The iPad will be available in a slew of other countries in late April.

Fewer jobs lost than anticipated

Nonfarm payrolls fell by 36,000 jobs in February, compared to the Bloomberg estimate, which called for a 68,000 decrease in jobs, while January was revised lower to -26,000 from -20,000 and December’s figure was positively revised to -109,000 from the initial report of -150,000. The unemployment rate remained at 9.7%, while expectations were that the rate would increase to 9.8%. Average hourly earnings rose 0.1%, slightly below the Street's forecast of a 0.2% increase, while average weekly hours fell to 33.8 from 33.9, compared to the forecast calling for it to decline to 33.7. Losses were largest in construction, at 64,000, while temporary services added 48,000, and manufacturing and retail were nearly flat. Government payrolls fell by 18,000, as Census hiring of 15,000 was offset by losses in postal workers. Treasuries are continuing their move lower after the report.

The other release on today’s US economic calendar, scheduled to be released in the last hour of the trading day, is consumer credit, expected to have fallen by $4.5 billion in January.

European shares advance as Greece nears meeting with German officials

Stocks in Europe are advancing after yesterday’s Greek bond deal saw demand outpacing the size of the offering by nearly three times, despite having to offer a yield of 6.3% to attract demand, as the deal indicates that investors are willing to buy the debt, easing concerns of the ability of the nation to raise funds. Greek Prime Minister Papandreou and German Chancellor Merkel are set to meet in Berlin on Friday evening, and ahead of the meeting, Merkel said “we should stand helpfully by Greece’s side, and not encourage complications,” while adding that Greece has “grabbed the bull by the horns” with the additional 4.8 billion euros ($6.5 billion), or 2% of GDP, in deficit reduction cuts this week and that the bond issue yesterday gives “cause for optimism.” Germany’s economy minister Bruederle said that Papandreou said they do not want one cent and “we don’t want to give him one cent either.” Papandreou today said that Greece is “not looking for money” from Merkel, adding “What we need is the support of the EU” to borrow at more favorable conditions should financial markets confidence in the nation wane.

In economic news, German factory orders surged in January, more than offsetting the prior month’s decline, after orders increased 4.3% month-over-month and 19.6% year-over-year, better than expectations of 1.3% and 15.4%, respectively. In the UK, producer prices rose in February from a year earlier by the most since December 2008, at 4.1%, on higher gas and food prices.

In equity news, Deutsche Bank AG (DB $68) is higher after German’s biggest bank said there will be “no material impact” after Moody’s Investors Service downgraded its credit rating yesterday due to the company’s dependence on the securities unit. Veolia Environment (VE $32), the world’s biggest water company according to Bloomberg, is modestly lower after missing analyst forecasts for its full year net income.

Britain’s FTSE 100 Index is 0.8% higher, France’s CAC-40 Index is up 1.1%, Germany’s DAX Index is advancing 0.9%, Spain’s IBEX 35 Index is higher by 1.2%, and Greece’s Athex Composite is up by 1.3%.

Asia advances as China pledges growth while monitoring property speculation

Markets in Asia were higher on news from China’s annual legislative meeting where growth was reaffirmed despite efforts to rein in property speculation, news from Greece yesterday that the government was able to sell bonds in a successful auction that saw demand nearly three times higher than offered and the US reported a better-than-expected initial jobless claims report. In a speech equivalent of the US State of the Union address, Chinese Premier Wen opened the 10 day National People’s Congress meeting by affirming a target of 8% growth, which has been set and exceeded for each of the last five years, along with 3% inflation and a “basically stable” currency. Wen said that moderately loose monetary policy and proactive fiscal stance will continue, adding that the government “must not interpret the economic turnaround as a fundamental improvement in the economic situation.” Wen reiterated pledges to crack down on housing speculation, land hoarding and excessive property price gains in some cities by using taxes and credit policies, saying “latent risks in the banking and public-finance sectors are increasing.” Additionally, the Chinese government pledged to raise health and social security spending, and expand pensions, and indicated no decrease in fiscal stimulus by targeting a budget deficit of 2.8% of GDP, similar to last year’s ratio. The Shanghai Composite Index added 0.3%, while Hong Kong’s Hang Seng Index advanced 1.0%.

In banking news, the China Banking Regulatory Commission (CBRC) Chairman Liu said that real estate is a “highly speculative industry” that should be monitored, while saying that bad loans at the nation’s banks have fallen to less than 500 billion yuan, and the bad-loans ratio stands at 1.58%. CBRC’s Liu said that capital adequacy ratios are “dynamic” and no changes have yet to be made. Attending the meeting, the Chairman of Industrial & Commercial Bank of China (IDCBY $37), the world’s largest lender by market value according to Bloomberg, said they aim to pace growth in accordance with demand on both a monthly and quarterly basis. In response to three banks filing plans to raise capital over the past week, the company said it has no near-term plan to raise capital, as its capital adequacy ratio, which stood at 12.6% at the end of 3Q, was “relatively better compared to other banks.”