While you were sleeping: UPDATED Wall St steady as Bank of England drops rate

Wall Street was little changed as investors eyed Friday's US jobs data to gauge the odds of a US Federal Reserve rate increase this year, while the Bank of England lowered its key rate for the first time since 2009.

After Wednesday's better-than-expected ADP jobs data, a Labor Department report showed initial claims for state unemployment benefits unexpectedly rose, gaining 3000 to a seasonally adjusted 269,000 for the week ended July 30.

"The data do indicate the economy and the labour market are improving," Joel Naroff, chief economist at Naroff Economic Advisors in Holland, Pennsylvania, told Reuters.

A government report on Friday is expected to show that US non-farm payrolls rose by 180,000 in July, while the unemployment rate is expected to fall to 4.8% from June's 4.9%, according to economists polled by Reuters.

At the close, the Dow Jones Industrial Average was down just 1.95 points, or less than 0.1%, to 18,352.05. The Nasdaq Composite Index added 0.1% to 5166.25 and the Standard & Poor's 500 Index eased less than a point to 2164.25.

In the Dow, Walt Disney and Home Depot, down 1.2% and 1% respectively, outweighed advances in shares of Visa and Microsoft, up 0.8% and 0.7% respectively.

BoE cuts rate to 0.25%
In Europe, the Stoxx 600 Index ended the session with an increase of 0.7% from the previous close, as the Bank of England cut its key bank rate from 0.5% to a historic low of 0.25% as part of a package of fresh stimulus measures. The bank also flagged the potential for a still lower rate.

"If the incoming data prove broadly consistent with the August Inflation Report forecast, a majority of members expect to support a further cut in bank rate to its effective lower bound at one of the MPC's forthcoming meetings during the course of the year," the BoE said in a statement.

"The [Monetary Policy Committee] currently judges this bound to be close to but a little above zero."

Germany's DAX index rose 0.6%, as did France's CAC 40 index, while the UK's FTSE 100 index rallied 1.6%.

"They did what everybody hoped they would do to save the financial system," Michael Woischneck, a senior equities manager at Lampe Asset Management in Dusseldorf, Germany, told Bloomberg.

"If we can do anything to stabilise the UK economy, our trading partners, that's good for Europe. Markets are happy for today, but I think it won't last very long."

Meanwhile, former Fed chairman Alan Greenspan suggested oil prices had probably bottomed out at about $US40-50 a barrel over the next couple of years.

(BusinessDesk)

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