US & World Daily Markets Financial Briefing 01-09-2006

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There will be no World Daily Markets Briefing on Monday 4th September, owing to the Labor Day holiday in the US.

U.S. Stocks at a Glance

Stocks rise on August jobs data

NEW YORK - Stocks rose in early trading Friday after the Labor Department said the economy added 128,000 jobs in August, signaling that an economic slowdown might not be as severe as some have predicted.
   
Wall Street had been awaiting the nonfarm payroll report in a week of otherwise light trading ahead of the long Labor Day weekend. Investors are keeping tabs on the unemployment rate both as an indicator of how quickly the economy might be slowing and out of concerns over wage inflation.

The market was little moved Thursday ahead of the report despite Federal Reserve Chairman Ben Bernanke's comments that productivity growth is "likely to continue for some time."
   
In corporate news Friday, Bristol-Myers Squibb rose after a judge issued an injunction on sales of a generic form of the drug maker's blood-thinning drug, Plavix, citing possible patent infringement. Bristol-Myers, which makes the drug with France's Sanofi-Aventis SA, gained $1.14, or 5.2 percent, rising to $22.89.
   
Aerospace giant Lockheed Martin Corp. advanced after confirming it received a multibillion NASA contract for construction of a spacecraft capable of sending astronauts to the moon and perhaps to Mars. Lockheed rose $1 to $83.60.
   
Intel Corp. also moved higher amid reports that it would slash up to 20,000 jobs next week. Though the cuts were largely expected, the stock rose 20 cents to $19.77.
   
In the first hour of trading, the Dow Jones industrial average rose 33.78, or 0.30 percent, to 11,415.93.
   
Broader stock indicators were also up. The Standard & Poor's 500 index gained 4.22, or 0.32 percent, increasing to 1,308.04, and the Nasdaq composite index rose 8.81, or 0.40 percent, to 2,192.56.

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Dollar enjoys slight boost by US jobs news

LONDON - The dollar bounced back slightly after a fairly solid US jobs report allayed fears that the US economy is experiencing a sharp slowdown.
   
Though the US economy added an expected 128,000 jobs during August, jobs growth in June and July was higher than previously estimated and the unemployment rate dropped a notch to 4.7 pct. Meanwhile, the release showed that year-on-year earnings are up 3.9 pct, the highest since June 2001.
   
Analysts said the latest snapshot, released by the Labor Department, was consistent with predictions of moderating economic growth and unchanged policy from the US Federal Reserve.
   
Various other indicators have shown the US economy flagging of late and as a result most market participants think today's jobs news will cement expectations that the Fed will keep rates on hold for the months to come.
   
The rate-setting Federal Open Market Committee kept its key Fed funds rate on hold on August 8 at 5.25 pct after 17 consecutive quarter point increases.
   
In contrast to the Fed, most expect the European Central Bank to lift borrowing costs in both October and December.
   
Analysts said the expected narrowing of yield differentials between the US and the euro zone has helped the euro push up towards the 1.30 usd mark.
   
In his press conference yesterday following the much-anticipated decision to keep refi rate on hold at 3.00 pct, the ECB president Jean-Claude Trichet stressed that the central bank will maintain "strong vigilance" on inflation risks and reiterated his view that monetary policy in the 12-nation currency zone remains accommodative, despite the anticipated US growth slowdown.
   
Trichet also said further rate hikes -- the ECB has steadily raised rates from 2.00 pct since last December -- are warranted should the economic recovery continue. The first half of the year was stronger than anticipated by the central bank and that seems to have continued into the third quarter, he added.
   
Analysts said Trichet's assessment fits in with the market view that rates will rise a quarter point in both October and December, which would take the refi rate up to 3.50 pct.

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The European Markets at 12.00 GMT

London - UK leading shares were higher midday, extending earlier gains ahead of key US jobs data due this afternoon, with mining issues prominent among gainers, while Centrica jumped on rumours Gazprom Is about to table a 350 pence offer for the UK gas supplier, dealers said.
   
At 11.55 am, the FTSE 100 index was 32.6 points firmer at 5,938.7, close to the day's highs, while the wider markets also racked up gains.

Frankfurt - At 11.39 am, the DAX 30 index was 18.58 points or 0.32 pct higher at 5,878.15, having moved between 5,856.49 and 5,884.52 so far this session. The MDAX was at 8,183.46, up 25.36 points or 0.31 pct, while the TecDAX was at 644.10, down 3.19 points or 0.49 pct.

Paris - Share prices were higher midday on bargain-hunting and positive US futures and as Sanofi-Aventis rose in heavy volume, shrugging off a profit-warning over its Plavix blockbuster, dealers said. At 11.50 am the CAC 40 index was up 20.11 or 0.39 pct at 5,185.15. Volume was 1.4 bln euro.

Amsterdam - Share prices were slightly up in midday trade on positive US futures pointing to a higher Wall Street opening, dealers said.  At 12.39 pm, the AEX was 2.21 points or 0.47 pct higher at 471.22, after opening at 469.22 and trading in the range of 469.15-471.74.

Brussels - Shares were higher in midday trade, with financial services group KBC and utility Suez leading the blue chips, analysts said. At 1.57 pm, the Bel 20 was up 23.58 points or 0.60 pct at 3,929.59.

Milan - Share prices were higher at midday, with investors' attention focused on the release of US job data later today, and with Mediaset leading the advance amid speculation about the TV sector reorganisation, dealers said.
   
At 12.50 pm, the Mibtel index was up 0.49 pct to 29,179 points and the S&P/Mib added 0.45 pct to 38,110, while volumes were 1.45 bln eur.

Madrid - Share prices were higher in thin midday trade on the first trading day of September and ahead of an expected positive opening on Wall Street, with Sacyr Vallehermoso extending gains after its first half results, dealers said.
   
At 12.25 pm, the IBEX 35 index was up 52.6 points at 12,197.3, after trading in a range of 12,150-12,203, on volume of 564 mln eur.

Stockholm - Shares remained in positive territory in midday trade, slightly extending the morning gains ahead of the keenly awaited US employment data, with healthcare provider Capio maintaining its sharp gains sparked by a bid from two private equity groups, dealers said.
   
At 12.25 pm, the OMX Stockholm index was up 0.68 pct at 321.11 points, while the OMX Stockholm 30 index was up 0.58 pct at 999.94. Turnover was 10.81 bln skr.

Helsinki - Helsinki shares were flat in midday trade ahead of key US jobs data later this afternoon, with profit-taking in Nokia weighing on the market and offsetting gains in Neste Oil and engineering stocks, dealers said.

At 12.50 pm, the OMX Helsinki 25 index was 0.10 pct lower at 2,562.12 and the OMX Helsinki index was down 0.29 pct at 8,874.01 on a turnover of 329 mln eur.

Athens - Shares were still up in late afternoon trade, led by banking blue chips, as recent first half year results lifted local market sentiment, brokers said.
  
At 3.20 pm the ASE general index was up 0.8 pct at 3,900.9 points, with advancers outnumbering decliners 109 to 103. The blue chip index was up 1 pct at 2,124.3 points. Mid caps were 0.5 pct higher at 4,210.9 points, and small caps were 0.5 pct higher to 789.1 points.

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Asian shares close mixed on cautious trade ahead of US jobs data

HONG KONG - Shares across the Asia-Pacific region closed mixed in generally cautious trade ahead of the release of US jobs data tonight, dealers said.
   
Tokyo shares ended slightly lower as investors awaited the release later today of the US non-farm payrolls data for last month, dealers said.
   
Some market participants opted to cash-in profits on gains made yesterday, when the benchmark Nikkei index climbed by 1.7 pct, but losses were countered by bargain hunting in shipbuilders, steel makers and select high-technology shares, they added.
   
The blue-chip Nikkei 225 Stock Average ended 6.51 points lower at 16,134.25, off a low of 16,029.56. The broader TOPIX index of all first-section issues lost 1.11 points or 0.1 pct to settle at 1,633.35, off a low of 1,624.35.
   
The US jobs data are expected to provide investors with more evidence about whether or not the economy in the US -- Japan's major trading partner -- has slowed enough to ward off further increases in interest rates there.
   
"A wait-and-see mood was evident," said SBI Securities market analyst Hideyuki Suzuki, "as participants also want to see how the US market reacts to the latest non-farm payrolls data, given the fact that there are no strong domestic leads to trade on."
   
Australian shares also finished lower as investors took profits after recent solid gains and turned cautious ahead of the release in the US tonight of key non-farm payrolls data, dealers said.
   
The S&P/ASX 200 fell 18.3 points or 0.36 pct to close at 5,097.1. The benchmark indicator closed off the day's low of 5,091.2, with the high at 5,121.3. Over the trading week the key index gained 73.5 points or 1.5 pct.
   
Hong Kong shares were flat in afternoon trade as the market awaited the US figures, although select blue chips and property counters attracted buying interest, dealers said.
   
At 3:28 pm the Hang Seng Index was up 10.74 points at  17,403.0.
   
In China, A-shares in Shanghai and Shenzhen closed lower on profit-taking with banks and telecom stocks losing ground, dealers said. The Shanghai A-share Index lost 23.16 points or 1.33 pct to 1,720.55 and the Shenzhen A-share Index was down 6.22 points or 1.42 pct at 432.34.
   
Seoul shares ended slightly higher on institutional interest, with SK Telecom and Hyundai Motor leading the gains, dealers said.
   
SK Telecom rallied after announcing a 110 bln won share buyback program while Hyundai Motor attracted investors with robust August sales.
   
The KOSPI index closed up 3.93 points or 0.29 pct at 1,356.67, off a high if 1,357.01 and a low of 1,349.63. The main board index ended the week with a solid gain of 27.32 points.

Asian Bourse Round-Up

For a full list of closing figures, click here

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