U.S. Jobs Data Dampen World Markets
European stock markets traded lower Thursday after soft U.S. jobs data reined in hopes for gains on Wall Street. Japanese stocks were the best-performing in Asia, enjoying a strong rebound amid mounting hopes that further stimulus measures will be announced soon.
In Europe, the FTSE 100 index of leading British shares was down 31.32 points, or 0.6 percent, at 5,271.55 while Germany’s DAX fell 23.92 points, or 0.4 percent, to 6,162.39. The CAC-40 in France was 23.78 points, or 0.7 percent, lower at 3,624.15.
Wall Street was poised for a fairly subdued opening — Dow futures were up 6 points at 10,358 while the broader Standard & Poor’s 500 futures rose 1 point at 1,087.70.
Wall Street futures had been trading higher earlier in the session following news that Intel Corp. is acquiring McAfee Inc. for $7.68 billion, in another sign that corporate activity is picking up.
However, news that the number of initial claims for U.S. unemployment benefits jumped by 12,000 to 500,000 last week reined in the optimism as the consensus in the markets was for a modest drop in claims.
The rise in jobless claims has added to fears about the pace of the recovery in the U.S. There are even fears that the U.S. economy may actually fall back into recession.
The focus later will likely center on a speech by St. Louis Fed president James Bullard, who has already suggested that further stimulus measures are possible to get the U.S. economic recovery back on track.
“This double-dip prospect for the U.S. keeps coming up so any signs of concern here could again precipitate another wave of selling,” said Will Hedden, sales trader at IG Index.
While U.S. growth hopes have diminished, there are rising expectations about the European economic recovery, after figures showed a surprisingly big 1.1 percent monthly rise in British retail sales in July and Germany’s central bank revised up its forecasts.
The Bundesbank now thinks that the German economy, Europe’s largest, will grow by about 3 percent this year after a spectacular second-quarter growth spurt — that’s way up on its previous forecast of 1.9 percent.
However, the Budesbank warned of a slowdown in the second half of the year as the global recovery stalls.
As a result, the euro has not garnered much support from the seemingly divergent trend, trading 0.2 percent higher at $1.2874.
Earlier in Asia, most stock markets ended the session modestly higher. Japan’s Nikkei 225 stock average was the standout, closing 122.14 points, or 1.3 percent, higher at 9,362.68.
There’s growing market speculation that the Bank of Japan is examining fresh measures to boost liquidity, that could rein in the appreciation of the yen, which has been a major concern for many of Japan’s export-dependent businesses.
Though that speculation helped stocks earlier, the dollar was trading 0.2 percent lower at 85.23 yen as investors sought the relative safe-haven status of the U.S. currency amid the renewed U.S. economic concerns — last week, the dollar fell to a 15-year low of 84.75 yen.
Elsewhere in Asia, the Shanghai Composite Index added 0.8 percent to 2,687.98, led by refiners and other energy companies. South Korea’s Kospi climbed 1 percent to 1,779.64 and Hong Kong’s Hang Seng index rose 0.2 percent to 21,068.15.
Australia’s S&P/ASX 200 recovered from early losses to gain 0.1 percent to 4,479.00, though sentiment was clouded by uncertainties over miner BHP Billiton Ltd.‘s hostile $38.5 billion takeover bid for one of the world’s biggest fertilizer producers.
Benchmark crude for September delivery was down 25 cents at $75.17 in electronic trading on the New York Mercantile Exchange.
PAN PYLAS, AP Business Writer LONDON