NEW YORK – A stronger-than-expected February jobs report may carry over and give a shot in the arm to the U.S. stock market early next 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.
Wall Street also will get a pulse reading from two tech bellwethers and international trade deficit data next week.
Center stage, though, belongs to oil.
The surge in the price of oil has underscored concerns about inflation and fears that higher energy costs will pinch corporate profits and hit consumers in the wallet. But oil worries temporarily took a back seat to the robust jobs figure Friday, which helped fuel a market rally.
Meanwhile, U.S. employers created 262,000 jobs last month, the biggest gain in four months, the government reported. The unemployment rate rose to 5.4 percent from January's 5.2 percent, but the gain partly reflected an increase in workers entering the labor force, the Labor Department (search) said.
Some investors worried the February jobs number would come in too high. A figure that exceeded, say, 300,000, could have fanned already heightened inflationary concerns and led the Federal Reserve to raise interest rates at a faster pace to cool down the market. Higher interest rates weigh on stocks because they raise borrowing costs.
But the jobs figure proved to be good news for stocks, said Bill Strazzullo, chief market strategist at State Street Global Markets.
"Stocks kind of want the Goldilocks thing. They want to see strength, but they don't want to see too much strength where you get an accelerated pace of (Fed) tightening," he said.
On Friday, the blue-chip Dow Jones industrial average (search) soared to 10,940.55, its highest level since June 2001, putting it back in sight of the psychologically important 11,000 mark.
The broad Standard & Poor's 500 Index (search) finished at 1,222.12, its highest close since July 2001.
For the week, the Dow was up 0.91 percent, the S&P 500 rose 0.89 percent, and the Nasdaq was up 0.25 percent.
With the quarterly earnings season coming to a close, the corporate news menu is light with updates from two technology powerhouses highlighting the week.
Analysts expect few surprises from Texas Instruments Inc. (TXN), the world's largest maker of chips for cell phones, when it gives its mid-quarter report Monday, with many forecasting the company will simply tighten its existing range of estimates, with a small chance for upside.
Intel Corp. (INTC), the world's largest chipmaker, will update its first-quarter financial targets Thursday, although the company's chief financial officer recently said that the first two months of the quarter made him very comfortable with the company's estimates.
S&P 500 companies' profit growth so far in the quarter is about 20.3 percent, a percentage largely expected by analysts.
As of Friday, with nearly all S&P 500 companies reporting, 67 percent have beaten analysts' estimates, while 19 percent missed forecasts, according to Reuters Estimates.
By comparison, at the same time last year, 67 percent beat analysts' forecasts and 14 percent missed.
"The jobs figures are definitely a positive. On top of that, corporate profits look good. But in the near term, the word is 'oil,"' said John Cunningham, chief investment officer at J&W Seligman.
The economic data calendar is also light next week.
Although spring is a couple of weeks away, the trendy color on Wall Street will be beige.
The Federal Reserve's (search) "beige" book, an anecdotal survey of economic conditions in the districts of the 12 regional Fed banks, comes out Wednesday at 2 p.m..
International trade figures are due Friday at 8:30 a.m. , with economists expecting the U.S. trade deficit to have widened slightly in January to $56.5 billion from $56.4 billion in December.
The huge U.S. trade deficit (search), which shows the gap between U.S. exports and imports, has weighed heavily on the dollar because it raises questions about the economy's strength.