Upbeat Jobs Data Leads To Early Strength On Wall Street
Stocks have
moved moderately higher in early trading on Friday, as traders react
positively to the monthly jobs report. The major averages have all moved
to the upside, adding to the gains posted in the two previous sessions.
The major averages have not seen much follow-through on their initial upward move but remain firmly positive. The Dow is up 59.84 points or 0.4 percent at 13,635.20, the Nasdaq is up 15.27 points or 0.5 percent at 3,164.73 and the S&P 500 is up 7.84 points or 0.5 percent at 1,469.24.
The early strength on Wall Street comes on the heels of the release of a report from the Labor Department showing that continued job growth pushed the unemployment rate down to its lowest level in well over three years.
The
report showed that employment increased by 114,000 jobs in September,
roughly in line with the increase expected by economists.
Job
growth in the previous month was much strong than previously estimated,
with employment rising by 142,000 jobs in August compared to the
addition of 96,000 jobs originally reported.
The continued job growth pushed the unemployment rate
down to 7.8 percent in September from 8.1 percent in August. With the
drop, the unemployment fell to its lowest level since January of 2009.
The notable drop by the unemployment rate came as the volatile household survey said total employment rose by 873,000 jobs in September compared to the addition of 418,000 people to the workforce.
Peter Boockvar,
managing director at Miller Tabak, said, "Bottom line, the largest
increase in the household survey since 2003 is the main focus of the
markets due to the drop in the unemployment rate that it caused, thus
putting aside the lackluster gain in private sector payrolls for the 2nd straight month."
Airline stocks have shown a strong move to the upside in early trading, driving the NYSE Arca Airline Index up by 1.7 percent. With the gain, the index has risen to its best intraday level in almost three months.
Significant
strength has also emerged among housing stocks, as reflected by the 1.3
percent gain being posted by the Philadelphia Housing Sector Index.
Brokerage, banking, and steel stocks are also posting notable gains in
early trading.
In overseas trading, stock markets across the Asia-Pacific region moved mostly higher on Friday, even as the Bank of Japan held off on fresh easing measures. Japan's Nikkei 225 Index rose by 0.4 percent, while Hong Kong's Hang Seng Index advanced by 0.5 percent.
The major European markets have also shown notable moves to the upside on the day. While the U.K.'s FTSE 100 Index has risen by 0.8 percent, the German DAX Index and the French CAC 40 Index are climbing 1.2 percent and 1.6 percent, respectively.
In the bond market, treasuries have come under pressure on the heels of the upbeat jobs data. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is up by 5.5 basis points at 1.72 percent.
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TSX Edges Up At Open Friday
Toronto stocks edged up at open Friday amid marginal buying across a variety of sectors, with the S&P/TSX Composite Index adding 3.43 points or 0.03 percent to 12,451.11.
Among base-metals stocks, Teck Resources rose close to 3 percent and First Quantum Minerals gained close to 1 percent.
In the oil patch, Niko Resources was up over 2 percent, while Enbridge Inc. was adding close to 1 percent.
Meanwhile gold stocks were trading lower, with Allied Nevada Gold, Alamos Gold Inc. Detour Gold and Eldorado Gold losing around 1 percent each.
Global bio-pharmaceutical company AEterna Zentaris Inc. dived nearly 8 percent.
During New York morning trading on Friday, the Canadian dollar
traded sharply higher against major opponents following the release of
country's unemployment rate data for the month of September and the
building permits data for August.
According to a report released
by the Statistics Canada, the economy created 52,000 jobs in September
mainly in full-time work. However, the unemployment rate rose 0.1
percentage points to 7.4 percent as more people participated in the
labor market.
Separately, the agency said municipalities issued
building permits worth $7.3 billion in August, a 7.9 percent increase,
following a 2.8 percent decline in July.
From the U.S., the Labor Department
said that employment increased by 114,000 jobs in September following
an upwardly revised increase of 142,000 jobs in August. Economists had
expected employment to increase by 113,000 jobs compared to the addition
of 96,000 jobs originally reported for the previous month.
The continued job growth pushed the unemployment rate down
to 7.8 percent in September from 8.1 percent in August. The drop
surprised economists, who had expected the unemployment rate to come in
unchanged.
At present, the loonie is trading at a fresh
multi-month high of 0.9996 against the Australian dollar, new multi-week
highs of 0.9737 against the US dollar and 80.97 versus the yen, compared to yesterday's close of 1.0044, 0.9805 and 80.08, respectively.
Against the euro, the Canadian currency also advanced in today's morning session and hit a 3-day high of 1.2689 by about 8:55 am ET from recent low of 1.2770.
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European Markets Firmly In The Green Ahead Of U.S. Jobs Data
The European markets are
firmly in the green on Friday, ahead of the key monthly jobs data from
the U.S. Labor Department, after Spain said it does not require a
bailout now. The Asian markets closed higher, even as the central bank
in Japan refrained from announcing additional stimulus measures, and the
U.S. futures indicate a firm start.
Economists expect an
increase of about 113,000 U.S. jobs in September following the addition
of 96,000 jobs in August. Despite continued job growth, the unemployment
rate is expected to come in unchanged at 8.1 percent.
The French economy
will stagnate in the second half of this year, extending the period of
stagnation into five quarters, reports said citing the latest forecasts
from statistical office Insee. The statistical office also forecasts the
Eurozone economy to have entered recession in the third quarter.
Recession is expected to continue in the fourth quarter.
The Bank of Japan
abstained from announcing more stimulus on Friday after lifting its
asset purchase by 10 trillion yen last month despite mounting political
pressure and further weakening of economic activity.
The policy board led by Governor Masaaki Shirakawa,
retained the benchmark overnight uncollateralized call rate at 0-0.1
percent. The board also decided to maintain the size of the asset
purchase and credit facility at 55 trillion yen and 25 trillion yen,
respectively.
The Euro Stoxx 50 index of eurozone bluechip stocks is adding 1.01 percent, while the Stoxx Europe 50 index, which includes some major U.K. companies, is gaining 0.67 percent.
The German DAX is adding 0.75 percent and the French CAC 40 is gaining 0.97 percent. The UK's FTSE 100 is advancing 0.44 percent and Switzerland's SMI is rising 0.39 percent.
In Frankfurt, Volkswagen, BMW and Daimler are gaining between 1.9 percent and 1.3 percent. Commerzbank and Deutsche Bank are moderately up.
Air
Berlin, Germany's second-largest airline, reported a decline in
passenger numbers and capacity for the month of September, following its
earlier decision to reduce capacity and fleet with a view to bringing
the company back to profitability. The stock is gaining 1.2 percent.
Lanxess is declining 1.5 percent. K+S, Allianz, EON and RWE are losing moderately. Munich Re is down 0.2 percent. Nomura cut the stock to "Reduce" from "Buy." Gerresheimer is declining 1.9 percent. Cheuvreux reduced its rating on the stock.
In Paris, Vallourec is gaining 2.8 percent and Technip is rising 2.7 percent. BNP Paribas and Societe Generale are adding 2.4 percent. Credit Agricole is advancing 1.6 percent.
Bouygues is falling 0.7 percent after a broker downgrade. UBS added Air Liquide to 'Least Preferred List." The stock is up 0.3 percent.
In London, Eurasian Natural Resources
is climbing 5.4 percent. Kazakhmys and Vedanta are gaining around 4.2
percent each. Rio Tinto is climbing 2.6 percent. Rexam and John Wood
Group are gaining 2.5 percent each.
Energy services company John Wood Group
said it continues to deliver good growth and is still confident of
achieving full-year performance in line with expectations. The stock is up 2.2 percent.
Telecom Plus is rising 2.4 percent. The firm expects first-half pre-tax profits and earnings per share firmly ahead of last year.
Burberry is up 1.3 percent, reportedly on a positive broker recommendation. Tesco is declining 2.7 percent and Next is down 1.2 percent. Old Mutual is falling 1.9 percent.
KCOM Group is declining around 8 percent after warning of macro-economic uncertainty in the second half. Givaudan is climbing 2.2 percent in Zurich. UBS added the stock to "Most Preferred List'' in European chemicals.
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Asian Stocks Rise Before US Jobs Data
Asian stocks rose
broadly on Friday, with commodity-related stocks pacing the gainers,
after a report showed the number of Americans filing new claims for
unemployment benefits rose less than expected last week and the European
Central Bank reiterated its commitment to buy bonds of troubled euro
zone countries. Despite some disappointment over the outcome of a Bank
of Japan policy meeting, the underlying sentiment remained fairly
positive ahead of a key U.S. jobs report due later in the day.
Japanese shares
posted modest gains after the Bank of Japan kept monetary policy
unchanged, but cut its assessment of the economy, citing weakening
exports and production. The Nikkei average rose 0.4 percent, while the
broader Topix index edged up 0.2 percent. Heavyweight Fast Retailing
rose 1.8 percent, electronics component maker TDK advanced 1.9 percent,
shipping line Mitsui OSK Lines gained 2.6 percent on rising freight rates and Shionogi & Co. rallied 3.4 percent on a brokerage upgrade.
Technology shares such as Kyocera and Tokyo Electron rose about 2 percent each, while automakers like Honda Motor, Nissan Motor and Toyota Motor fell between half a percent and 1.6 percent. Shares of semiconductor-related Sumco Corp.
jumped 5.9 percent on expectations of a recovery in earnings after
South Korean consumer electronics manufacturer Samsung estimated record
profits in the three months to September.
Hong Kong's Hang Seng index
rose half a percent, with mainland automakers leading the gainers after
Germany's BMW said that its sales in China surged by 55 percent from a
year earlier to around 27,000 units in September. The Chinese market was
shut for the Golden Week holidays running from September 30 to October
7.
Australian shares hit a fresh 14-month high in afternoon deals
following strong leads from Wall Street overnight. With mining and
banking stocks pacing the gains, both the benchmark S&P/ASX 200 and
the broader All Ordinaries index ended the session up about 0.9 percent
each.
BHP Billiton added a percent amid reports it was one
among those in talks with Petrobras to purchase a stake in the
Brazilian energy giant's Gulf of Mexico oilfields. Fortescue Metals
Group jumped 4.6 percent after board member Ken Ambrecht announced his
retirement. Rival Rio Tinto rallied 1.8 percent.
Financial stocks
also gained ground, with ANZ, Commonwealth and NAB up about half a
percent each, while Westpac added 1.2 percent. Commonwealth said today
that its board approved various amendments to the rules of the Dividend
Reinvestment Plan in an attempt to align the underlying rules with
current best market practice, provide additional flexibility and update
terminology.
Shares of Bank of Queensland plunged 5.2
percent after the lender indicated it is heading for a full-year loss.
Retailers ended mostly higher, with Woolworths up 1.3 percent after the
Australian Competition and Consumer Commission announced it would oppose
the retailer's move to acquire hardware stores in Victoria. BlueScope
Steel soared 4.4 percent after automakers responded to a proposal
levying a tariff on imported steel.
South Korea's Kospi average posted a modest 0.1 percent gain, with uncertainty over a bailout for struggling Spain limiting further upside. Heavyweight Samsung Electronics rose
1.7 percent early in the session before paring gains to end up about
0.2 percent after the tech conglomerate said that it expects third
quarter operating profit of 8.10 trillion won, powered by strong sales
of its Galaxy smartphones. Shares of LG Display slumped 4.5 percent on a brokerage downgrade.
New Zealand shares rose, mirroring gains in regional stocks. The benchmark NZX-50
gained 0.6 percent, with Michael Hill International pacing the gainers
with a 9 percent rally after the jeweler lifted its first-quarter
revenue by 14 percent, boosted by improved trading in North American and
Australian markets. Gold miner OceanaGold climbed 3.6 percent to hit a
22-month high after the company provided an update on its Didipio
project.
Fletcher Building, the nation's largest construction
company, and industrial rubber products supplier Skellerup Holdings
jumped 3-4 percent, while retailers Pumpkin Patch and Kathmandu Holdings rose 1-2 percent.
Elsewhere, India's benchmark Sensex
was moving down 0.7 percent, weighed down by profit taking in banking,
technology and oil/gas stocks following recent sharp gains. Malaysia's KLSE Composite was down marginally, while Indonesia's Jakarta Composite index rose 0.7 percent, Singapore's Straits Times index gained 0.6 percent and the Taiwan Weighted average edged up 0.1 percent.
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Crude Holds Above $90
The price of crude oil
was moving lower Friday morning as traders await cues from the non-farm
payroll report from the U.S. Labor Department, due out later today.
Light Sweet Crude Oil
(WTI) futures for November delivery, shed $0.90 to $90.81 a barrel.
Yesterday, oil rebounded from its 2-month low to settle higher on supply
concerns from the Middle East after tensions between Turkey and Syria
escalated. Oil prices held on to the gains after minutes of the Federal
Reserve's policy meet showed members agreed to a third round of
quantitative easing last month, due to the uncertainty prevailing in the
economy.
This morning, the U.S. dollar was recovering
from a two-week low versus the euro and the Swiss franc, while ticking
higher against sterling. The buck was paring recent gains versus the
yen.
In economic news, Germany's factory orders declined more
than expected in August, the Federal Ministry of Economics and
Technology reported. Orders fell 1.3 percent from a month ago, when it rose 0.3 percent. Orders were forecast to decline by 0.5 percent. Domestic orders slipped 3 percent on a monthly basis, while foreign orders remained flat in August.
Traders will
look to the non-farm payroll report from the U.S. Labor Department due
out at 8.30 a.m ET. Economists expect non-farm payrolls for September to
increase by 113,000, while the unemployment rate is expected to remain
unchanged at 8.1 percent. The private sector is expected to have added
130,000 jobs. In August, the economy added 96,000 jobs, while the jobless rate dipped to 81. percent.
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