World Market Overview 06/06/2011
US markets
A pair of conferences in California this week will focus on new services and software for consumers that are delivered over the Internet. The world's major oil exporters will weigh whether soaring oil prices justify a formal output increase, while U.S. agencies report on how those surging costs are affecting the country's trade data. U.S. stocks fell Friday to cap their first five week losing streak since July 2004, as a dismal jobs report added to the drumbeat of investor concerns about a slowing economy. The disappointing report follows a string of weak economic data that have fueled anxiety on Wall Street.
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Regional manufacturing reports have been weak, consumer confidence has dropped and auto sales suffered a setback last month. The Dow Jones Industrial Average fell 97.29 points, or 0.8%, to 12151.26, led lower by Alcoa, which dropped 28 cents, or 1.7%, to $15.92. The blue-chip index has dropped 5.1% during its five-week losing skid and closed Friday at its lowest level since March 23. Friday's declines come after the DJIA had slumped 321 points in back to back sessions. The average registered its biggest three-day drop since March 16. The Standard & Poor's 500 stock index shed 12.78 points, or 1%, to 1300.16, in a broad selloff led by the telecommunications, technology and consumer discretionary sectors. Nine of the 10 S&P 500's sectors finished in the red; energy was the only sector that closed in positive territory. The technology-oriented Nasdaq Composite Index slumped 40.53 points, or 1.5%, to 2732.78.
European markets
European stock markets closed mostly firmer on Friday as the euro rallied strongly, supported by hopes of a deal to resolve Greek's debt crisis and very disappointing US jobs data. Dealers said news that the US economy generated only 54,000 new jobs in May, one quarter of the previous month and way below forecasts for 169,000, spooked investors growing increasingly unhappy at signs the global economy is slowing. Economists blamed the disappointing figures in part on the impact of Japan's March 11 earthquake-tsunami disaster on US manufacturers as well as a jump in oil prices but the headline figures were still terrible. In London, the benchmark FTSE 100 index of top shares closed up 0.12 percent to 5,855.01 points. In Frankfurt, the DAX added 0.49 percent to 7,109.03 points while in Paris the CAC 40 was virtually unchanged. The other European markets were mostly higher but Swiss stocks fell. Meanwhile, Greece won pledges of a new bailout deal coupled with fresh funds to pay its bills as Prime Minister George Papandreou got a positive EU-IMF review of his nation's public finances. The Athens stock market soared more than four percent on the news but the financial markets will likely test that reaction on Monday given concerns that creditors may have to wait longer to get their investment back under any new deal.
Asian markets
Asian shares were mostly lower in edgy trade Friday as dealers nervously awaited a key US jobs report amid concerns over the world's biggest economy. The losses come a day after a regional sell-off that was caused by a slew of miserable US data and follow a warning from Moody's that it could downgrade the US debt rating. Tokyo fell 0.66 percent, or 62.83 points, to 9,492.21 and Sydney closed 0.38 percent, or 17.3 points, lower at 4,583.1 while Hong Kong dropped 0.41 percent. Seoul ended flat, edging down 0.73 points to 2,113.47. However, Shanghai gained 0.89 percent on bargain hunting after the index hit a four month low on Thursday. Investors were given a weak lead from Wall Street, where the Dow fell 0.34 percent following a 2.22 percent fall on Wednesday. Recent optimism over the US economy has been replaced by fear following a succession of poor indicators. In Tokyo the Nikkei shrugged off the failure of a no confidence vote to oust Prime Minister Naoto Kan, who had earlier pledged to step down once the country is on the road to recovery from the March 11 quake and nuclear disaster.
Base metals
Copper closed 2% higher on the London Metal Exchange Friday after stronger than expected data on the U.S.' non-manufacturing sector countered a disappointing monthly employment report. The metal rallied in line with its base metal peers as traders were heartened by the Institute for Supply Management's purchasing managers' index, which unexpectedly rose to 54.6 in May from 52.8 in April. The price of copper had earlier plunged more than $100 on the LME after a dismal U.S. nonfarm payrolls report added to investor worries over the strength and pace of the recovery in the world's largest economy. Nevertheless, LME three month copper ended the session up $175 at $9,095/ton. Three month zinc also closed the day strongly, up 1.8% at $2,258/ton. Three month tin was the only base metal to close lower, finishing the open outcry session down 0.8% at $26,400/ton. Chinese markets are closed Monday as the country celebrates its national Dragon Boat Festival holiday, and analysts said trade may therefore begin the new week cautiously. Crude oil futures settled little changed near $100 a barrel Friday as weakness in the dollar offset early losses on disappointing U.S. jobs data. Earlier losses in crude oil, spurred by unexpected gains in U.S. oil inventories, grew larger after the Labor Department reported that nonfarm payrolls rose by 54,000 in May, while economists expected a rise of 160,000. The unemployment rate rose to 9.1% from 9.0% a month earlier, counter to forecasts for a drop to 8.9%. Light, sweet crude oil for July delivery on the New York Mercantile Exchange settled down 18 cents at $100.22 a barrel. Oil hit an early low of $98.12, the weakest intraday level since May 24, but recovered to top $100 a barrel at the settlement for the seventh-straight day. July ICE Brent crude settled 30 cents higher, at $115.84 a barrel. Gold futures rose Friday after a report showed U.S. employers last month added the smallest number of jobs since September, spurring buying in the metal on worries about a further economic slowdown. Gold for August delivery , the most active contract, added $10.20, or 0.7%, to $1,542.70 an ounce on the Comex division of the New York Mercantile Exchange. Meanwhile, silver for July delivery shed 9 cents, or 0.2%, to $36.12 an ounce, recovering from steeper losses earlier in the session.
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