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.
| Canadian Market |  | | CADUSD | Oil | Gold | Allbanc |  |  |  |  | | Please click on the images to view our interactive charts | | 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. |
| European Market | | | | FTSE 100 | Euronext | Dax perf | CAC 40 |  |  |  |  | | Please click on the images to view our interactive charts | | 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. |
| Asia Market | 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. |
| Commodities | | | | USDCAD | USDEUR | USDGBP | USDJPY |  |  |  |  | | Please click on the images to view our interactive charts | | 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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