Solid US jobs data lift markets

AP News
Posted: Nov 08, 2013 12:04 PM
Solid US jobs data lift markets

LONDON (AP) — Markets mostly rose Friday after another solid U.S. jobs report, and despite concerns that the Federal Reserve might pull back on its monetary stimulus earlier than expected.

Government figures showed that the U.S. generated 204,000 jobs in October, way ahead of market expectations for a more modest increase of 125,000. September's figure was also revised up to show a 163,000 rise.

However, the unemployment rate, which is based on a separate survey, rose to 7.3 percent from 7.2 percent.

The figures did not initially have a big impact, but Wall Street gained in confidence as the day progressed. Investors seemed to focus more on the improvement in the economy rather than the possibility that the Fed might be more willing to rein in its stimulus. Strong economic data this week had already prompted traders to expect the Fed to act sooner.

Many analysts also wonder how accurate the October figures are since the U.S. government was partially shut down during much of the month.

"Given the impact of the shutdown, we have to wait until November's report to get a fuller picture of what's happening this fall," said Dan Greenhaus, chief global strategist at BTIG.

In Europe, the FTSE 100 index of leading British shares closed 0.2 percent higher at 6,708.42 while Germany's DAX ended flat at 9,078.28. French shares underperformed in the wake of a downgrade of the country's debt by Standard & Poor's — the CAC-40 fell 0.5 percent to 4,260.44.

In the U.S., the Dow Jones industrial average was up 0.5 percent at 15,676.36 while the broader S&P 500 index rose 0.8 percent to 1,762.11.

The dollar was stronger following the payrolls data, 0.9 percent higher against the Japanese yen, at 99 yen, while the euro was down 0.5 percent at $1.3357.

On Thursday, the euro took a big knock after the European Central Bank cut its main interest rate to a record low of 0.25 percent, a move that surprised many, but not all, in the markets.

Earlier in Asia, Japan's Nikkei 225 sank 1 percent to end at 14,086.80 and Seoul's Kospi dropped 1 percent to 1,984.87. Hong Kong's Hang Seng slid 0.6 percent to 22,744.39. In mainland China, the Shanghai Composite fell 1.1 percent to 2,106.13.

Investors in Asia are also hanging back ahead of a weekend meeting in Beijing where China's communist leaders are expected to lay out their long-term plan for the world's No. 2 economy. A report that showed strong growth in Chinese exports last month was not enough to counter investor caution.