US futures shave gains after jobless claims data

AP News
Posted: Apr 04, 2013 9:23 AM

NEW YORK (AP) — Early gains for U.S. stock market futures were shaved Thursday after the Labor Department reported an unexpected increase in weekly unemployment applications.

The number of Americans seeking unemployment aid rose to the highest level since late November last week, although the increase partly reflects seasonal distortions around the spring holidays.

Dow Jones industrial average futures added 2 points to 14,489. Nasdaq 100 futures gave up 1.5 points to 2,785.50. Standard & Poor's 500 futures added 1 point to 1,549.50.

Futures trading is not always an accurate indicator of action after the regular session opens, The major indexes fell sharply Wednesday following weak reports on hiring and service industries, with the S&P 500 dropping 1.1 percent.

The weekly unemployment application data is often volatile, and a Labor Department spokesman said it can be difficult to seasonally adjust the figures during the Easter holiday, because the timing of the holiday varies from year to year.

Still, the department has reported three straight weeks of increases, which suggests that companies may be cutting jobs.

The government will issue the March employment report Friday.

World markets were mixed following a series of economic moves.

Japan launched an aggressive monetary stimulus plan earlier Thursday. The Bank of Japan said its policy overhaul is intended to double the money supply and achieve a 2 percent inflation target in about two years. It joins the U.S. Federal Reserve and other major central banks in flooding money into the economy in hopes of getting corporations and consumers to begin spending more, ultimately driving growth.

Japanese stocks rallied with the announcement. The Nikkei ended 2.2 percent higher.

Elsewhere in Asia, South Korea's Kospi dropped 1.2 percent as bellicose rhetoric between North Korea and the U.S. rattled the local market.

Meanwhile, the European Central Bank left its key interest rate unchanged at a record low of 0.75 percent. However, it held off on further stimulus for the euro area's weak economy. The central bank for the 17 European Union countries that use the euro currency expects a gradual recovery in the eurozone's economy later this year.

Separately, the Bank of England also kept interest rates unchanged and refrained from injecting more stimulus into the economy. Hong Kong and mainland Chinese markets were closed for a public holiday.

Stocks in Europe were also unable to hold onto earlier gains following the policy announcements. Germany's DAX dipped 0.18 percent to 7,8602, while the CAC-40 in France was 0.26 percent lower at 3,745. Britain's FTSE 100 fell 0.7 percent to 6,374.

In currency trading, the dollar jumped about 2.7 percent against the Japanese yen, after the Bank of Japan announced a massive monetary stimulus plan. The dollar also gained against a basket of world currencies.