While you were sleeping: Facebook soars, jobs eyed

Friday 6th November 2015

Wall Street was mixed as investors were on tenterhooks about Friday’s US jobs data to gauge how serious the Federal Reserve might be in its repeated comments about a potential December interest rate hike.

A Labor Department report showed initial claims for state unemployment benefits rose 16,000 to a seasonally adjusted 276,000 for the week ended October 31. It was the highest level in five weeks, as well as the biggest weekly gain since late February.

Investors are especially focused on Friday’s nonfarm payrolls as Fed Chair Janet Yellen on Wednesday reiterated a December rate rise was still possible.

"Investors have adjusted their probabilities, adjusted their risk, adjusted their positions, now they’re going to see what happens tomorrow," John Briggs, Americas head of strategy at RBS in Stamford, Connecticut, referring to the US jobs data due on Friday, told Reuters.

In New York trading at about 12.40pm, the Dow Jones industrial average eked out a 0.03 percent gain. At about 12.26pm trading, the Standard & Poor’s 500 Index slipped 0.15 percent while the Nasdaq Composite Index dropped 0.46 percent.

A separate report on Thursday showed productivity unexpectedly increased at a 1.6 percent annualised rate in the third quarter, while labour costs gained less than forecast.

In the Dow, gains in shares of Visa and those of JPMorgan Chase, last up 1.6 percent and 1.2 percent respectively, offset declines in shares of Chevron and those of Apple, last down 1.4 percent and 1.3 percent respectively.

US Treasuries declined.

"The tone has changed, people are now anticipating the Fed to tighten in December, and tomorrow’s employment report is going to be critical," Larry Milstein, managing director of government-debt trading at RW Pressprich & Co in New York, told Bloomberg. "You’re going to need a pretty significant miss to get the Fed off tightening in December."

Shares of Facebook jumped, last up 4.9 percent, after the company reported sales and profit that surpassed expectations.

“Their core mobile-advertising business is still very strong and has a lot of runway,” Josh Olson, an analyst at Edward Jones & Co, told Bloomberg. Olson has a buy rating on the stock.

Qualcomm however disappointed, sending its stock tumbling. It last traded 14 percent lower.

There were fresh deals too. Shares of HomeAway jumped, last up 24.3 percent, after Expedia said it agreed to buy the company for US$3.9 billion.

In Europe, the Stoxx 600 Index finished the day with a 0.4 percent decline from the previous close, weighed down by energy and commodity stocks.

The UK’s FTSE 100 Index dropped 0.8 percent, while the pound weakened as well, as the Bank of England downgraded its growth and inflation forecasts. However Mark Carney, governor of the BoE, told Bloomberg that it would be “prudent” for Britons to prepare for a 2016 rate rise.

France’s CAC 40 Index added 0.4 percent, while Germany’s DAX Index increased 0.6 percent.

BusinessDesk.co.nz

Comments from our readers

No comments yet