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By Carlos Guillen

The Dow Jones Industrial Average made an encouraging jump during the first couple of minutes after the opening bell that took the index to a new high, only to quickly fall below its prior record level, as most of the data presented today was below expectations.

Clearly disappointing today was data that showed the number of people filing for unemployment benefits for the first time suddenly ticked higher, apparently putting an end to the rather encouraging trend we witnessed in the prior several weeks. According to the Department of Labor, initial claims during the week ended March 29 totaled 326,000, increasing from the 310,000 revised figure reported for the prior week and landing above the Street's estimate of 320,000. On a positive note, the result still remains well below 350,000 level, which economists say is consistent with moderate labor market growth of about 150,000 net new jobs a month. The initial claims' four-week moving average was 319,500, increasing from the prior week's average of 319,250. This higher than expected uptick in the data is certainly not giving investors confidence that tomorrow's government jobs data will come in better than expected.

Also a bit discouraging today was that the U.S. trade deficit increased more than expected in February, as exports decreased while imports climbed, a scenario that certainly does not bode well for economic growth. According to the U.S. Department of Commerce, the trade deficit during February totaled $42.3 billion, increasing from the $39.3 billion reported for January and landing above the Street's consensus estimate of $39.3 billion. In terms of the two main components, exports decreased 1.05 percent to $190.4 billion, as overseas demand eased mainly for industrial supplies and materials by $2.7 billion and for capital goods by $0.9 billion. Imports climbed 0.43 percent to $232.7 billion, mainly as domestic demand increased for automotive vehicles, parts, and engines by $1.0 billion. Given that net-exports play a direct effect on gross domestic product (GDP), a wider deficit could lead economists to revise their growth estimates lower for the first quarter of this year.

Somewhat mixed today was the worse than expected non-manufacturing sector data, but it still headed in the right direction. ISM data posted today showed that economic activity in the non-manufacturing sector (NYSE:NMI) expanded at a faster pace, after a slowdown in the prior month. The Non-manufacturing ISM Index in March clocked in at 53.1 percent, increasing from the 51.6 percent reported for February and landing below the 53.5 percent consensus estimate. Given that a reading above 50 percent indicates expansion, the result represented the 50th month that economic activity in the non-manufacturing sector grew. Also a bit encouraging was that employment activity in the non-manufacturing sector increased from 47.5 to 53.6 percent, indicating growth in employment after a sudden contraction in February.

Also encouraging was that the direction of change in the NMI was the same as that taken by the PMI during the same month. In fact, as we mentioned two days ago, PMI in March clocked in at 53.7 percent, increasing from the 53.2 percent reported for February and landing below the 54.0 percent consensus estimate.

As it stands, despite that the Dow fell below its prior record high of 15,588, the index is attempting to make a comeback. Tomorrow will be an exciting day as the official government's jobs data will be on display, so let us sit tight.

Job Cuts Running Low
By David Urani

To be fair, the Challenger, Gray & Christmas monthly layoff announcement report isn't usually much of a market mover but there was some good news to be found today to make one feel a little better about the labor market. Total layoff announcements in March totaled 34,399, up from 31,835 in February, but still at a relative level that one could say is quite healthy. But the really good sign comes from 1Q as a whole, when 121,341 layoffs were announced, which is down 16% from a year ago. The first quarter in particular generally has some of the most layoffs each year. And on that note, the first quarter of this year had the fewest layoff announcements of any first quarter since 1995. That also follows a great December, which had posted a 13-year low monthly total for any month.

That said it wasn't good news all around, particularly for retail where 11,394 cuts were announced, a 71% increase from last year. Then again that perhaps shouldn't be a surprise as the likes of Sears, Macy's and Target haven't had the best time recently.