While you were sleeping: Surprise drop in jobless claims

BUSINESSDESK: Stocks received a boost after US jobless claims unexpectedly fell to the lowest level since February 2008, bolstering hopes the struggling labour market may finally show some signs of improvement.

Initial claims for unemployment benefits dropped to a seasonally adjusted 339,000 in the week ended October 6, the lowest since February 2008. Economists polled by Bloomberg News and Reuters had forecast claims rising to 370,000.

"The overall trend seems to be that the labour market is improving," Brian Kim, a currency strategist at RBS Securities in Stamford, Connecticut, told Reuters.

In afternoon trading in New York, the Dow Jones Industrial Average eked out a 0.06% gain, while the Standard & Poor's 500 rose 0.33%. The Nasdaq Composite Index slipped 0.06%.

A separate report showed that the US trade deficit widened by 4.1% to US$44.2 billion in August.

Caution remains key. Economists were less optimistic about US growth, lowering their median growth forecasts to an annualised 1.6% for the first quarter of 2013, compared to 1.7% last month, according to a Reuters poll today.

Yet Europe's Stoxx 600 Index also received a lift from the US jobs data, ending the day with a 0.8% advance over the previous close. National benchmark stock indexes also climbed in the UK, Germany and France, rising 0.9%, 1.1% and 1.4%, respectively.

Among gainers were shares of banks in Europe and the US, including Bank of America and JPMorgan Chase after a report the European Union may push back the deadline for applying tougher Basel bank-capital rules for as long as a year, according to Bloomberg.

In Spain, shares of banks dropped, however, after Standard & Poor's downgrade of the nation's credit rating to one level above junk. Still, the nation's bonds held up well as Italy drew solid demand for its auction of three-year debt.

Italy sold 3.75 billion euros of its benchmark three-year bond. Investors bid for 1.67 times the amount offered, up from 1.49 times last month.

"The auctions were pretty good, they issued at the top end of the range and that had a small positive effect," Mohit Kumar, head of European fixed-income strategy at Deutsche Bank AG in London, told Bloomberg. "The market is still waiting for the next step, which is for Spain to ask for a bailout."

This article is tagged with the following keywords. Find out more about My Tags

Comment & Question

Commenter icon key: Subscriber Verified

Post New comment or question

Plain text

  • No HTML tags allowed.
  • Web page addresses and e-mail addresses turn into links automatically.
  • Lines and paragraphs break automatically.

NZ Market Snapshot

Forex

Sym Price Change
USD 0.7990 0.0030 0.38%
AUD 0.9056 -0.0015 -0.17%
EUR 0.6233 0.0009 0.14%
GBP 0.4937 0.0009 0.18%
HKD 6.1985 0.0227 0.37%
JPY 85.1130 0.0280 0.03%

Commods

Commodity Price Change Time
Gold Index 1244.2 5.700 2014-10-20T00:
Oil Brent 85.4 -0.760 2014-10-20T00:
Oil Nymex 82.8 -0.040 2014-10-20T00:
Silver Index 17.3 0.020 2014-10-20T00:

Indices

Symbol Open High Last %
NZX 50 5197.9 5238.9 5197.9 0.68%
NASDAQ 4254.2 4316.9 4258.4 1.35%
DAX 8819.3 8834.7 8850.3 -1.50%
DJI 16373.1 16401.6 16380.4 0.12%
FTSE 6310.3 6320.3 6310.3 -0.68%
HKSE 23073.4 23231.5 23070.3 -0.25%
NI225 15115.3 15115.3 15111.2 -1.25%