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While you were sleeping: US jobs, oil support mood

Thursday 4th August 2016

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Wall Street eked out gains, bolstered by a rebound in oil prices and better-than-expected private sector US jobs data. 

In 3.10pm trading in New York, the Dow Jones Industrial Average inched 0.06 percent higher, while the Nasdaq Composite Index added 0.24 percent. In 2.54pm trading, the Standard & Poor’s 500 Index eked out a 0.08 percent gain.

“There’s slow movement in a market that’s looking for a reason to go up or go down -- it just hasn’t found any,” Jeff Carbone, managing partner of Cornerstone Financial Partners in Charlotte, North Carolina, told Bloomberg. “We haven’t seen that breakout that would suggest the market is based on fundamentals, it’s still very tied to central banks.”

The Dow rose as gains in shares of Goldman Sachs and those of Apple, recently up 1.4 percent and 1.2 percent respectively, outweighed slides in shares of Pfizer and those of Merck, down 3.6 percent and 1.3 percent respectively.

Chicago Federal Reserve Bank President Charles Evans on Wednesday said the US central bank might need to lift its interest rate this year, saying that the country’s real economy is doing “quite well.”

"I do think that perhaps one rate increase could be appropriate this year," Evans told reporters on Wednesday, according to media reports. "Even if I would prefer none until we saw inflation much more strongly," Evans later noted. 

Indeed, the US labour market offered fresh signs of strength. The ADP National Employment Report showed private employers added 179,000 jobs in July, which was above economists’ expectations. 

Investors are now eyeing Friday’s federal government nonfarm payrolls data.

Shares of Wal-Mart traded lower, down 0.5 percent as of 3.20pm in New York, after the Wall Street Journal reported, citing people familiar with the matter, the company is in talks to buy online discount retailer Jet.com, one of the most ambitious challengers to Amazon.com.

Oil prices climbed more than 3 percent.

"We are not surprised to see spot prices rebounding on the gasoline draw," Tariq Zahir, trader in crude oil spreads at Tyche Capital Advisors in New York, told Reuters. "But I think this will be short-lived."

"The bottom line is the Street in the second quarter got a little ahead of itself in calling for rebalancing of supply-demand after Canadian and Nigerian supply disruptions,” according to Zahir. “We are going into the third and fourth quarters with those supplies back online and refinery maintenance coming up."

In Europe, the Stoxx 600 Index ended the session with a gain of 0.1 percent from the previous close. Germany’s DAX index rose 0.3 percent. The UK’s FTSE 100 index fell 0.2 percent, as did France’s CAC 40 index.

HSBC shares rose after the bank announced an unexpected buyback of US$2.5 billion. Shares of ING Groep rose after the Dutch bank posted better-than-expected profit in the second quarter.

BusinessDesk.co.nz

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