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While you were sleeping Wall St fluctuates

Friday 10th May 2013

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An unexpected drop in US weekly jobless claims and solid earnings including from News Corp weren't enough to keep Wall Street from sliding after initially setting fresh records.

The labour market provided further reason for optimism about the general outlook for the US economy, following the April jobs data released last Friday. Initial claims for state unemployment benefits declined 4,000 to a seasonally adjusted 323,000, the lowest level in more than five years, according to Labor Department data.

In afternoon trading in New York, however, the Dow Jones Industrial Average slipped 0.2 percent, the Standard & Poor's 500 Index shed 0.4 percent, while the Nasdaq Composite Index dipped 0.1 percent. The S&P 500 hit an all-time high of 1,635.01 earlier in the session, while the Dow touched a record 15,144.83.

The tail-end of the American earnings seasons also lent a helping hand to the overall mood. Shares of News Corp climbed, last up 4.7 percent, after earnings exceeded analysts' expectations.

While stocks fluctuated today, there are plenty of signs that the bulls might be here to stay.

"Aside from a few pullbacks where people take profits, there's still plenty of upside," Randy Frederick, the Austin-based managing director of active trading and derivatives at Charles Schwab, told Bloomberg News.

"Despite the fact that we're hitting records every day, there's no reason to believe this won't continue for a while. The only thing that can derail this type of a move is some sort of really unexpected news event," he said.

Shares of Barnes & Noble jumped, last up 22.7 percent, after a report Microsoft was considering an offer to buy all of Nook Media's digital assets for US$1 billion.

Shares of Facebook rose 0.9 percent amid a report it is in advanced talks to buy Israel-based Waze for US$800 million to US$1 billion. Officials at Waze and Facebook declined to comment on the report by business daily Calcalist, Reuters said.

In Europe, the benchmark Stoxx 600 Index edged nearly 0.1 percent higher. National benchmark stock indexes in London and Germany also gained, up 0.1 percent and 0.2 percent respectively. France's CAC 40 shed 0.7 percent.

The latest economic data from the UK were better than anticipated. UK industrial production increased more than expected in March, gaining 0.7 percent from the prior month, providing a welcome sign of recovery.

The Bank of England's Monetary Policy Committee today kept its target for bond purchases at 375 billion pounds, and held its key interest rate at a record low 0.5 percent.

The yen fell to a four-year low against the US dollar, weakening 1.5 percent to 100.46 per dollar.

"Defense of the 100-yen barrier was weak this time around, so traders took advantage and zoomed ahead," Sebastien Galy, currency strategist at Societe Generale in New York, told Reuters. "We see further upside in dollar/yen now that that barrier is gone."

BusinessDesk.co.nz

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