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World stocks up, Wall St drops ahead of jobs report

NEW YORK, July 8, 2016

World stocks broadly climbed as riskier assets like equities received a bump from positive US data, though US equities and long-dated Treasury yields fell along with oil prices amid investor caution ahead of Friday's non-farm payrolls report.

Wall Street initially opened higher as strong private sector employment data and a drop in jobless claims pointed to a steadying labor market ahead of the key monthly payrolls report, but reversed course to follow oil prices lower.

The ADP national employment report showed that 172,000 jobs were added in the private sector in June, surpassing economists' expectation of 159,000.

In May, ADP data showed private payrolls rose 168,000, but the government's non-farm payrolls data that month reported a gain of only 38,000 jobs, the smallest since September 2010.

"Investors are marking their time ahead of the jobs data," said Terry Sandven, chief equities strategist at US Bank Wealth Management. "The wall of worry has been under full construction since the May jobs data, so tomorrow's report will either suggest that the number was an anomaly or provide evidence of a weakening economy."

Oil prices slumped 4 per cent, wiping out early gains, after the US government reported that the drop in weekly crude stockpiles was close to analysts' forecasts, but far less than the decline expected by market optimists.

Equity markets around the world advanced, with MSCI's global gauge of stocks up 0.15 per cent.

The Dow Jones industrial average fell 59.72 points, or 0.33 per cent, to 17,858.9, the S&P 500 lost 5.1 points, or 0.24 per cent, to 2,094.63 and the Nasdaq Composite added 4.72 points, or 0.1 per cent, to 4,863.88.

US 30-year Treasuries rose 15/32 in price to yield 2.116 per cent. The 30-year note hit a record low of 2.098 per cent on Wednesday. Benchmark 10-year Treasuries were little changed in price to yield 1.3866 per cent after touching a record low of 1.321 per cent Wednesday.

European markets gained, ending a three-day slide with London's FTSE up 1.09 per cent. The CAC in Paris rose 0.8 per cent and Germany's DAX was 0.49 per cent higher. The pan-European FTSE 300 gained 1.04 per cent.

The British pound, which fell below $1.30 against the US dollar for the first time since 1985 on Wednesday, again turned lower. It was last down 0.3 per cent to $1.2898.

Sterling is down more than 14 per cent since Britain voted to exit the European Union on June 23, with some analysts expecting it to drop to $1.20 in coming months as the Bank of England prepares to ease monetary policy.

The dollar was 0.65 per cent lower against the yen at 100.68 yen, holding above its trough of 99 yen hit on June 24, the day after the British vote.

Traders said even positive data from Friday's jobs report was unlikely to sway the Federal Reserve to hike interest rates this year given global growth concerns, furthering boosting the yen.

The strong yen and Brexit fears have battered Japanese markets, with Japan's Nikkei stock index falling 0.67 per cent Thursday to drop for a third straight day.

Brent crude fell $2.12 to $46.63 a barrel. US crude dropped $2.14 to $45.29 a barrel.-Reuters




Tags: Jobs | stocks | Wall Street |

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