daytrades march 3 pre-market

Morning traders.

Market wrap: Australian stocks are likely to open cautiously higher after another rise in oil overnight trimmed gains on Wall Street following a promising jobs report.

The March SPI futures contract ended the night session 18 points or 0.38% ahead at 4803 as US stocks inched higher and Australian miners rebounded in overseas trade.

A strong private jobs report helped the benchmark S&P 500 close a wobbly session 0.16% higher. The Dow added 8 points or 0.07% and the Nasdaq was boosted by analyst upgrades for computer chip-makers, rising 0.39%.

"This is a fairly resilient market," the chief investment officer at Lee Munder Capital Group in the US told Bloomberg. "We're in a sustainable economic recovery. Without any serious move in oil prices, you'll probably get a market that has a firm foundation to it. In such a case, any pullback will be minor."

The market received an early boost from a private jobs report that topped economists' expectations and raised expectations for Friday's official monthly government report. However, the major indexes dipped into the red mid-session as oil pushed through US$102 a barrel.

Turmoil in the Middle East and North Africa continued overnight, with Libyan leader Moammar Gadhafi clinging to power as US warships approached, protests in Oman and an attack on an Iraqi refinery. An unexpected decline in US inventories added to the pressure. Crude futures were recently up $2.76 or 2.8% at $102.38 a barrel.

"I think oil's going to remain like a touchy teenager through the next couple of months as geopolitical tensions dominate the headlines," the chief economist at KBC Energy Economics told MarketWatch.

Precious metals continued to set new highs, fuelled by safe-haven buying, but moderated gains late in the session. Gold for April delivery set a record settlement of $1,437.70 an ounce in the US but was recently trading just $3 or 0.2% higher at $1,434. May silver had its highest US close in 31 years and recently was trading 17 cents or 0.5% stronger at $34.60 an ounce.

Industrial metals closed mixed and little changed as rising energy costs continued to weigh on the demand outlook. In London, copper added 0.1% and lead 0.4%. Aluminium eased 0.7%, nickel 0.6%, tin 2% and zinc 0.8%. US copper was recently off 0.4%.

The unrest in the Middle East helped send the major European markets lower for a second night. Britain's FTSE fell 0.35%, Germany's DAX 0.58% and France;s CAC 0.81%.

TRADING THEMES TODAY

OIL TURNS THE SCREW: At time of writing, oil was breaking to a new two-year high, supported by further signs of disruption in the Middle East/North Africa. It's hard to see share markets recovering any traction until the oil market calms, and that's unlikely to happen any time soon. In the meantime, expect the market to exhibit violent mood swings between optimism and pessimism that will offer great trading opportunities for the nimble and frayed nerves for longer-term investors. The smooth upwards glide from last July through to February is likely at an end for now. US action suggests a two-speed market here today, with resource stocks rising and financials soft. BHP, RIO and AWC all rallied in the US last night. However, much will depend on whether oil keeps running higher today.

ECONOMIC NEWS: The monthly performance of services index is due at 9.30 am. Monthly building approvals and the trade balance are due at 11.30 am. Tonight's schedule in the US includes weekly unemployment claims, the services PMI, revised unit labour costs, revised non-farm productivity and natural gas storage.

Good luck to all.