Global stock markets fall after strong US jobs report
Energy stocks lead an early decline on Wall Street
(35 minutes later)
LONDON — Global stocks fell Friday after a report showed U.S. companies continued to hire at a strong pace in March, a development that may well ratchet up expectations that the Federal Reserve will raise interest rates again sooner rather than later.
NEW YORK — Energy companies are leading a broad decline in early trading on Wall Street as the price of oil takes another sharp turn lower.
KEEPING SCORE: Stocks, already lower ahead of the monthly report, remained under pressure after the figures. Britain’s FTSE 100 was down 1.4 percent to 6,087.47 shortly after its release while Germany’s DAX dropped 2.5 percent to 9,715.99. France’s CAC 40 sank 2.6 percent to 4,273.24. Futures pointed to a tepid start for Wall Street. Dow futures and S&P futures fell 0.3 percent and 0.4 percent respectively.
Chevron dropped 2 percent shortly after the opening bell Friday, the biggest decline in the Dow Jones industrial average.
U.S. JOBS: The monthly U.S. jobs report for March showed 215,000 jobs were added, slightly above expectations of around 205,000. The unemployment rate ticked up to 5 percent, however, which could temper expectations that the Fed could bring forward its next expected interest rate increase.
The price of U.S. benchmark crude slumped 4 percent to just under $37 a barrel in New York.
ANALYST TAKE: “Another good month of hiring in the U.S. will encourage further chatter in some corners of the Fed moving closer to hiking interest rates again, but signs of weakening economic growth mean policymakers are likely to be cautious and hold off until the global economy is showing greater vigor and the U.S. economy more sparkle,” said Chris Williamson, chief economist at financial information company Markit.
Investors didn’t get much encouragement from a government report showing that hiring remained solid in the U.S. last month.
JAPAN: Earlier stocks, particularly in Asia, were hit by weak Japanese economic data. The Bank of Japan’s quarterly “tankan” index for large manufacturers fell to 6 points in March from 12 in December. Japan’s big exporters have been hit by a double whammy of a slowing Chinese economy and a rising yen. The index measures the percentage of responding companies that say business conditions are better minus the percentage that say they are worse. So an index level of 6 means slightly more companies are optimistic than pessimistic — but more pessimistic than three months ago.
The Dow Jones industrial average lost 94 points, or 0.5 percent, to 17,589.
ASIA’S SCORECARD: Tokyo’s Nikkei 225 sank 3.6 percent to 16,164.16, while South Korea’s Kospi fell 1.1 percent to 1,973.57. Hong Kong’s Hang Seng index declined 1.3 percent to 20,498.92 and the Shanghai Composite Index in mainland China finished 0.2 percent higher at 3,009.53 after trading lower for most of the day.
The Standard & Poor’s 500 index gave up 13 points, or 0.7 percent, to 2,046. The Nasdaq composite dropped 29 points, or 0.6 percent, to 4,840.
OIL: Benchmark U.S. crude fell $1 to $37.34 per barrel in New York. The contract rose 2 cents on Thursday. Brent crude, used to price international oils, dropped 97 cents to $39.36 a barrel in London.
CURRENCIES: The dollar fell to 111.86 yen from 112.51 yen, while the euro gained to $1.1428 from $1.1380.
Copyright 2016 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
Copyright 2016 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
