Rocky Week on Wall Street; Dow Closes Flat
QUEST: The US economy added 175,000 jobs in February. That was more than expected, 135,000, 145,000 was the number the market had thought might happen. And if you look over the last gains, you really will see how they've been climbing since the sharp slowdown in December. Look. I want to you to look at these particularly, because if you average over the course of the last year, I can tell you the number's roughly 189,000, 190,000 jobs. We got this blip here, and everybody was quite sure that that was about the weather. And there had been serious fears that this would also be about the weather, but it didn't turn out that way. The number was better than expected. And on a variety of matrices, whether it's number of hours worked, amount of hourly earnings, the under-employed, it all seems -- it has several sectors, including construction, education, professional services, all seemed to move higher. So, the US labor secretary put this into perspective on what these numbers meant.</s>THOMAS PEREZ, US LABOR SECRETARY: I think that businesses are bullish about the future. When I go around the country, and I spend a lot of time on the road, what I hear from the business community is that we're bullish about the future, we want to add jobs, and what we need to work with you, Tom Perez, on is making sure that we have the skilled workforce to expand. And so, when I see growth in professional business services, I'm not surprised, because you're -- that's part of the ramp up. And so, I'm very -- I'm heartened to see that.</s>QUEST: Now, where all this factored on Wall Street? Well, you can take these numbers and maybe today's gains on Wall Street have largely been driven by these better numbers, but the Dow was basically flat. The S&P; may have eked out a small gain. What, of course, moved the markets for most of the week was, frankly, Ukraine. And if you look at he way the Dow traded during the course of the week, there you have a sharp fall at the beginning -- well, not hugely sharp, but you do have a sharp fall. You have this dramatic rise on Tuesday, when it looked like a diplomatic solution was going to be forthcoming. And incidentally, that is the highest gain of the year so far, that single gain. We bounce around Wednesday and Thursday, a good -- another good gain there. And then, of course, bouncing around on Friday. All of which puts it into perspective as just how volatile these markets are. And at the same time, how much they're looking for certainty and direction. Alison Kosik is at the New York Stock Exchange and joins me now. This chart really does, more than anything else, Alison, just show the enormous difficulty of any investor in this scenario.</s>ALISON KOSIK, CNN BUSINESS CORRESPONDENT: Oh, you said it. Stocks were just all over the place this week, as you said. Monday it was the Dow having one of its biggest losses of the year. Tuesday, the Dow having its biggest gain of the year. Just look at the S&P; 500. Just this year, Richard, the S&P; 500 has hit record highs five times. And guess what? Three of those happened this week during this crisis between Ukraine and Russia. Can you make sense of that? I don't know. All right. So, we got this decent jobs report today, despite the bad weather, playing a very small very role in it. It kept investors in the game, ending the Dow on the positive side. Once again, the S&P; 500 ending at a record level, Richard.</s>QUEST: Alison, have a great weekend. Thank you.</s>KOSIK: You, too</s>QUEST: I want to move very swiftly on, because the question that Alison asked, can we make sense of a market that has hit three record highs in the same week as we've had what one person described as the worst geopolitical crisis of this century? John Silvia is the chief economist at Wells Fargo. John, you make sense of that question.</s>JOHN SILVIA, CHIEF ECONOMIST, WELLS FARGO: Lots of different pieces of information going in different directions. Clearly, the political situation was up and down, somewhat negative one day, somewhat positive the next. From an economics point of view, I would say that the number today was reassuring that the US economy looks like it's improving. It's going to be adding more jobs going forward. I think the overall growth pace of the US economy will be much better in the second half of this year than the first half, so I'm encouraged by the job numbers.</s>QUEST: Encouraged by the job numbers, but this market is volatile, and I -- don't worry, I'm not going to ask you to sort of predict a market. Let's face it, the sheer volatility that we saw this week --</s>SILVIA: Yes.</s>QUEST: -- bearing in mind Ukraine, it tells us something about the fragility of investors' nerves, doesn't it?</s>SILVIA: Oh, absolutely. It tells you that the market investor is very uncertain about the politics as well as the economics, and as you get new information, it immediately gets incorporated into the marketplace. But now, the market is on edge. How strong is this recovery? What is the position of Russia in the Crimea right now? How does this work with respect to the European trade? Natural gas energy coming into Europe? Obviously, a lot of information up and down, very uncertain period.</s>QUEST: There seems to be a suggestion that if you strip out these quirky oddball months or numbers and whether, the US is probably growing at roughly 2.4 to 2.5 percent on an underlying trend growth basis. Would you accept that?</s>SILVIA: I would accept that. I think when you look at consumer spending, business investment spending, a little bit in terms of trade, it looks like that underlying fundamental economy is still growing at 2, 2.5 percent, which is very good. And as the government sector sort of neutralizes itself as the year moves along, we should see 2.5 to 3 percent growth for the second half of this year.</s>QUEST: And as long -- since we have a second or two longer -- as long as tapering continues, everybody's now taking that in its stride, because it would take an enormous dislocation or disruption now for the Fed to change their plan to reduce tapering by $10 billion a month.</s>SILVIA: Oh, quite right, Richard. I think the Fed is really -- sort of clued in the market to what its intentions are. I think the markets adjusted to that. To get it off that path would take some significant, significant changes. So, I think right now, tapering is a sort of a done deal. We'll probably finished by October, and after that, I think the Fed will be neutral for a while. Don't expect for the fed to be raising rates before the second half of 2015 at the earliest.</s>QUEST: John, before I let you go, would you ever buy a bitcoin?</s>SILVIA: No.</s>QUEST: Right.</s>SILVIA: I really would not. I don't -- I just -- no.</s>QUEST: Right.</s>SILVIA: It's not my style.</s>QUEST: That's fine. That's fine.</s>SILVIA: Thanks, Richard.</s>QUEST: The only reason I ask you is because of our next story. Have a lovely weekend, John. Good -- and thank you for putting this economic situation into perspective. The reason I was asking John about that is because when we come back --</s>SILVIA: Thank you, Richard.</s>QUEST: -- after the break -- thank you, sir -- the chase is on to find the creator of bitcoin. A magazine alleges it's this man. A blaze of publicity followed. It's all wrong, says Mr. Nakamoto. You'll hear more after the break.