Aug 4 (Reuters) – U.S. stocks were higher and the U.S. dollar and Treasury yields lower after a new government jobs report showed a slowing, but still tight U.S. labor market.
Nonfarm payrolls increased by 187,000 jobs last month, the Labor Department said in its closely watched employment report on Friday, slightly below expectations of 200,000 jobs. At the same time, the unemployment rate fell to 3.5% from 3.6% in June.
Randy Frederick, managing director of trading and derivatives at Charles Schwab in Austin, Texas, said the mixed jobs report “plays into the soft landing, or the no-landing, narrative that the markets have been slowly trudging higher on.”
“This ought to relieve some of that concern about the fact that the economy is too strong, which would cause concern that perhaps we get another rate hike in September,” Frederick added.
The Dow Jones Industrial Average (.DJI) rose 0.35%, to 35,338.46 and the S&P 500 (.SPX) gained 0.59%, to 4,528.33.
The technology-heavy Nasdaq Composite (.IXIC) added about 1%, to 14,101.48. Two technology giants reported earnings after the market close on Thursday: Amazon (AMZN.O) showed sales growth and profit that beat analyst estimates, while Apple (AAPL.O) forecast a sales slump to continue into the current quarter.
European stock indexes fell on Friday, The STOXX 600 was down 0.2% on the day (.STOXX), while London’s FTSE 100 (.FTSE) was down 0.3%.
The MSCI All-World index (.MIWD00000PUS) was last up 0.16% following the job news. It had been headed for its biggest weekly drop in five months, thanks in part to a surge in government bond yields this week after more data pointed to slowing inflation and the prospect of a deluge of U.S. Treasury supply.
Economists who have long been forecasting a downturn by the fourth quarter of this year are increasingly becoming convinced that the “soft-landing” scenario for the economy envisaged by the U.S. Federal Reserve is now possible.
Data also showed the number of Americans filing new claims for unemployment benefit rose slightly last week, while layoffs dropped to an 11-month low in July as labour market conditions remained tight.
The benchmark indices closed little changed the previous day after a choppy trading session, as investors weighed up the implications of rising Treasury yields along with the latest batch of economic data and earnings.
“It’s a very fragile market,” said Francesco Sandrini, head of multi-asset strategy at Amundi.
The dollar meanwhile fell 0.5% against a basket of major currencies , a reversal after two consecutive weekly gains.
It has made the most headway against some of this year’s better-performing currencies, including the pound , under pressure since the Bank of England delivered a smaller rate rise than many had hoped for. Sterling was last up 0.5% on the day, still down about 0.5% in August.
China’s yuan , last flat on the day, gained some respite after an official said on Friday the central bank would use policy tools flexibly to ensure…
Source from www.reuters.com