Weak Jobs Report Sets Up a Strong Open

Most major markets are taking off Easter Monday, but Japan saw a modest gain.
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Stocks look to take their cues from Friday's

jobs report

this morning, which is to say they're set to run higher.

While the stock market was closed Good Friday, the bond market, open for half a day, hopped higher on generally weaker-than-expected March employment figures. Nonfarm payrolls grew only 46,000 in March, against expectations of 166,000 -- compliments of seasonal adjustments and some adverse weather. The year-on-year gain in average hourly earnings was just 3.6%, and that helped mitigate any worries on the drop in the unemployment rate to 4.2% -- a 20-year low.

The 30-year Treasury bond added over a point on the report, and today it is adding a little bit more. At 9 a.m. EDT, it was up 7/32 to 95 6/32, dropping the yield to 5.58%.

If there is any nervousness over what's going on in Kosovo and the

Pentagon's

announcement that the U.S. will send 2,000 ground troops and 24 Apache helicopters to the Balkans, it is being overrun for now by the good vibes from the jobs report and the resulting jump in the bonds. The

S&P 500

futures were up 10.3, better than 9 above fair value and indicating a good open. And there's a sense that the strength will extend beyond the first half-hour of trading.

"We had a decent recover on Thursday, and obviously the bond market is up over a point from where we settled," said Todd Clark, head of listed trading at

Charles Schwab

. "It looks like we can move up to the top of the recent range."

But it seems unlikely that that stocks have the strength to reach new highs just yet.

"We're going to mark some time while we wait to see some earnings releases," said Bill Allyn, head block trader at

Jefferies

. "I think we'll tread water between 9900 and 10,000. If we have a good earnings season here and continue to have moderate growth, we should easily get through 10,000 this spring and stay there."

It was a busy day in Tokyo, where the

Bank of Japan's

quarterly survey of business sentiment, the

tankan

, came in weaker than expected but still showed enough improvement to catapult stocks higher at the open.

It was not to last, however. Domestic investors were happy to sell into the rally, and the

Nikkei

, which briefly rose above 16,500, ended the day up a scant 44.59 to 16,334.78.

The rest of the world's major markets were closed for Easter Monday. And we are not bitter.

Monday's Wake-Up Watchlist

By

Brian Louis

Staff Reporter

  • Ameritech (AIT) - Get Report is selling 20 Midwestern cellular properties for $3.7 billion in cash to a venture of GTE (GTE) - Get Report and Georgetown Partners. Ameritech said the move "effectively meets" Justice Department conditions for approval of its merger with SBC Communications (SBC) . On Thursday, Federal Communications Commission Chairman William Kennard said he has "serious concerns" about whether the planned $61 billion merger of SBC and Ameritech is in the public interest.
  • Hanger Orthopedic Group (HGR) is buying the orthotics and prosthetics division of NovaCare (NOV) - Get Report in a deal valued at $455 million.
  • United Rentals (URI) - Get Report said it launched an unsolicited $22.75-a-share cash tender offer for all the outstanding shares of Rental Service (RSV) , a 32% premium over Rental Service's closing price Thursday. In other news (earnings estimates are from First Call):
  • Aspen Technologies (AZPN) - Get Report expects to post a "significant" operating loss in the third quarter. The current five-analyst estimate has earnings coming in at 18 cents a share in the quarter.
  • Axent Technologies (AXNT) expects to post a loss for the first quarter of between 5 cents to 10 cents a share before nonrecurring charges associated with the acquisitions of Internet Tools and PassGo, compared to income from continuing operations of 12 cents a share before items in the year-ago period. The 14-analyst consensus estimate currently calls for earnings of 18 cents.
  • Barnes & Noble's (BKS) - Get Report proposed acquisition of Ingram Book Group for $600 million, already under intense federal scrutiny, is now being probed by the California attorney general's office, The New York Times reported. The takeover is undergoing what is known as a second request review, a rare move that allows the Federal Trade Commission to extend its examination of the competitive impact of a proposed deal, the newspaper reported. The length and type of the review, however, does not necessarily mean the merger is in deep trouble, the newspaper said.
  • Britain's Cable & Wireless (CWZ) is pondering a proposal to merge the residential assets of its cable TV division with Telewest (TWSTY) , a rival operator, The Wall Street Journal reported, citing people familiar with the plan.
  • Eagle USA Airfreight (EUSA) - Get Report expects to post earnings of 27 cents to 29 cents a share in the second quarter, which would be above the current eight-analyst view of 24 cents.
  • Gartner Group's (IT) - Get Report plan to spin off most of the 47% of Gartner stock owned by IMS Health (RX) has some Gartner shareholders upset, the Heard on the Street column in the Journal reports. Some non-IMS shareholders object that the plan benefits only IMS, while hurting other investors by costing them their majority vote in electing Gartner's board, the article said.
  • General Instrument (GIC) said it will repurchase 5.3 million shares of its common stock owned by two partnerships affiliated with Forstmann Little for $148.4 million. In a separate transaction, Liberty Media (LMGA) has agreed to purchase 10 million General Instrument shares from the Forstmann Little partnerships for $280 million. Also, General Instrument said it expects Forstmann Little will soon sell additional General Instruments shares in a block transaction that will reduce its ownership interest in the company to about 1%.
  • Kohlberg Kravis Roberts plans to sell more than 25 million Gillette (G) - Get Report shares, worth more than $1.5 billion, in halving its profitable investment in the household goods concern.