MarketView for April 19

Summary

The major equity indexes were higher on Friday as earnings from Google and others lifted tech shares. However the gains were not enough to prevent the S&P 500 index from suffering its worst week since November. In particular, high volatility marked the week, with the S&P 500 falling 2.3 percent on Monday in its worst day since November 7. That in turn fueled talk that the market's long-awaited pullback had arrived.

For the week, the S&P 500 ended down 2.1 percent. The index, however, managed a finish above its 50-day moving average after ending below the level on Thursday for the first time this year. Helping out the S&P 500 on Friday were shares of Google, which gained 4.4 percent to $799.87 a day after posting upbeat results.

The Dow finished barely in positive territory, held back by shares of IBM, which posted its largest decline in eight years after the company's quarterly results missed estimates. IBM's shares ended down 8.3 percent at $190.

For the week, the Dow slid 2.1 percent, while the Nasdaq lost 2.7 percent. Markets were roiled earlier in the week by the plunge in gold prices and slower growth out of China, the world's second-largest economy. Still, the S&P 500 remains up about 9 percent for the year.

Friday's trading volume, at 6.4 billion shares, was the lowest of the week, but in line with the average for the year. Much of Boston was under virtual lockdown as police killed one suspect in the Boston Marathon bombing in a shootout and mounted house-to-house searches for a second man.

Less-than-stellar earnings from McDonald’s and General Electric also weighed on the blue chips.

Options volume began the day unusually light for expiration day, which is typically a heavily traded session. But trading in options picked up as the day progressed and ended in line with average levels.

On last month's expiration day, overall volume spiked to 8.6 billion shares traded, the busiest day of the year so far, but expiry days in January and February had volume of just 6.7 billion to 6.8 billion shares.

Approximately 6.4 billion shares changed hands on the three major equity exchanges, in line with this years average daily closing volume of about 6.4 billion shares.

Close Correlation between Housing Recovery and Unemployment

Unemployment rates fell in most states during March as compared to the year before, including California where joblessness fell to a four-year low, as the recovery picked up in places hit hard by the housing downturn.

Federal data released on Friday showed that, altogether, unemployment rates fell from March 2012 in 39 states and the District of Columbia, increased in eight, and were the same in three. From February, rates dropped in 26 states and the District of Columbia rose in seven and were unchanged in 17.

Nevada had the sharpest decrease over the year - the rate fell to 9.7 percent from 11.6 percent in March 2012. In California the unemployment rate fell to 9.4 percent, the lowest since December 2008 and more than a percentage point below March 2012, when it was 10.7 percent.

California and Nevada, two places where housing had once flourished, have consistently had some of the highest unemployment rates in the country over the last few years. Even with the drops in March, Nevada held the highest unemployment rate of all the states and California the third highest. Nevada's rate also rose from 9.6 percent in February and the state lost 2,900 jobs during the month, when seasonally adjusted.

Rhode Island had the second largest decline from the year before, with its jobless rate dropping to 9.1 percent from 10.6 percent in March 2012, followed by Florida, where the rate was 8.9 percent compared to 7.5 percent the year before.

In Idaho, Washington, Hawaii and Colorado, the jobless rates also were more than a percentage point lower than a year before.

Unlike previous downturns, the 2007-09 recession was fairly uniform, sparing only a few states. The recovery, though, began unevenly, with states rich in oil, natural gas and commodities pulling ahead and those where housing had been the major source of jobs limping for years after the real estate market collapsed.

Meanwhile, in March the Illinois jobless rate rose the most since March 2012, to 9.5 percent from 8.8 percent. The state also had the second highest jobless rate in the country last month, followed by California and Mississippi, even as it added 36,000 jobs from the year before, according to its employment department.

Indiana, Mississippi, New Hampshire, Pennsylvania, Delaware, North Dakota and Wisconsin also saw rate increases from March 2012. Meanwhile, the rates were unchanged in Alabama, New Mexico, and West Virginia.

From February, the jobless rate increases were mild, with Louisiana seeing the biggest rise, to 6.2 percent from 6 percent. Alaska, Florida, New Jersey, Rhode Island, Utah, Vermont, and Virginia experienced the largest decreases of 0.3 percentage points each. New Jersey's unemployment rate drop in March to 9 percent was greeted as good news by the state's political leaders.