A stronger-than-expected February jobs report may carry over and give a shot in the arm to the U.S. stock market early this week, but stubbornly high oil prices are likely to remain a spoiler.
Crude oil, which hit $53.78 a barrel Friday, is fast approaching the record high of $55.67 reached in October. The price surge has underscored concerns about inflation and fears that higher energy costs will pinch corporate profits and hit consumers in the wallet.
Still, oil worries temporarily took a back seat to the robust jobs figure Friday, which helped fuel a market rally.
U.S. employers created 262,000 jobs last month, the biggest gain in four months, the government reported. The unemployment rate climbed to 5.4% from January's 5.2%, but the gain partly reflected an increase in workers entering the labor force.
On Friday, the blue-chip Dow Jones industrial average soared to 10,940.55, its highest level since June 2001, putting it back in sight of the psychologically important 11,000 mark.
The Standard & Poor's 500 index finished at 1,222.12, its highest close since July 2001.
Holding on to those stock gains in the week ahead, however, will be tough.
Stocks feed off data -- economic data, earnings reports and corporate news. Good or bad, investors depend on that stream of information to make decisions on their holdings. But in the coming week, there's simply little news to be had -- there are very few relevant economic reports from the government and few earnings reports from market-moving companies.
In the absence of strong data, investors tend to stand pat, and a spate of profit taking may be inevitable after last week's strong gains.
Some companies will begin offering their mid-quarter updates this week. But barring an unforeseen bout of good news, treading water may be the best thing to hope for.
As of Friday, with nearly all S&P 500 companies reporting, 67% had beaten analysts' estimates, while 19% missed forecasts, according to Reuters Estimates.
By comparison, at the same time last year, 67% beat analysts' forecasts and 14% missed.
"The jobs figures are definitely a positive," said John Cunningham, chief investment officer at J&W Seligman & Co. "On top of that, corporate profits look good. But in the near term, the word is 'oil.' "
S&P 500 companies' profit growth in the quarter is about 20.3%, a percentage largely expected by analysts.
From Reuters and Associated Press
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The Week Ahead
* Federal Reserve reports on consumer credit for January.
* Quarterly earnings released by CMS Energy Corp., Kroger Co., Revlon Inc. and Tenet Healthcare Corp.
* Federal Reserve releases survey of regional economic conditions.
* Quarterly earnings released by Blockbuster Inc., Six Flags Inc. and Talbots Inc.
* Labor Department reports on weekly jobless claims.
* Treasury reports on federal budget.
* Freddie Mac, the mortgage company, reports on mortgage rates.
* Quarterly earnings released by Intel Corp., AnnTaylor Stores Corp., Borders Group Inc., TiVo Inc. and Western Wireless Corp.
* Commerce Department reports on international trade for January.